WorldCom's bank debt clamored upwards alongside of bond prices on reports that Rudy Giuliani has joined on with David Matlin of Matlin Patterson Asset Management to raise $1 billion to purchase WorldCom bonds. Several small pieces of WorldCom's bank debt traded in the 24-25 context last week as traditional distressed players looked to buy into the paper. The paper traded two weeks ago in the 22 1/2 23 1/2 range. The names of the players could not be determined. Calls to WorldCom and Matlin were not returned by press time. Attorneys at Weil, Gotshal & Manges, the firm representing WorldCom, also could not be reached by press time.
Despite the increased volume of trades over the last week, compared to the scarcity of trades since the company filed for bankruptcy, market players still maintain that bank debt holders have not sold out of their positions. One trader noted that investors preferred to trade the company's bonds, which are held in the same creditor class as the bank debt, because bank debt trades come with extra assignment fees which the bond trades do not carry.