A $10 million auction of AES Corp. bank debt went off in the low 80s last Monday, said traders. The buyer and seller could not be determined. The auction occurred as the Dec. 3 deadline approaches for a crucial exchange offer of up to $500 million of senior notes due 2002 and 2003 for new securities and cash. "It's very critical that they have that refinancing," said Mona Yee, a Fitch Ratings analyst. The company has $300 million of senior notes that mature on Dec. 15. If AES cannot complete its exchange, meeting that maturity will be difficult, explained market players.
One trader said he thought note holders were holding out in an act of brinkmanship. Recent deals, such as the one for CenterPoint Energy, have demonstrated to the market that people are willing to buy these energy assets but they should get a heavy coupon, he explained. "We feel the package that we have proposed to the '02 and '03 note holders is fair," said Ahmed Pasha, AES' investor relations spokesperson.