The bank debt of Encompass Services was said to have traded at 27 this week, down from the 35 level where traders had quoted the paper last week. The trade comes as the company announced that a rights offering, which incorporated a $35 million equity investment from Apollo Management, is not likely to be completed. In exchange for a second amendment to its bank loan, the company had pledged $31 million from the equity injection to bank debt holders. Encompass, which would have been in default under its bank agreement because the conditions were not met, has received a waiver until Oct. 15. Calls to Darren Miller, cfo, were not returned by press time.
Charter Communications' bank debt sunk a couple of points after the company revised its projections for its third quarter results downward. Market players said the paper traded in the 87 context immediately following the news, but it has since been moving in small pieces in the 85 1/2-86 1/2 range. Kent Kalkwarf, cfo, reportedly announced that the revision was due primarily to a loss of customers. Calls to Kalkwarf were referred to a spokesman, who noted that the downturn would not put the company's credit covenants under pressure.
Levels for Magellan Health Services' bank debt have been falling over the past couple of weeks as the company worked to refinance its bank facility before Sept. 30 to avoid a covenant violation. The company's term loan "B" has sunk from the 90s into the low 80s since the company announced that it is now pursuing a comprehensive capital restructuring plan rather than a bank loan refinancing. Traders said no trades have occurred this week. Calls to Magellan Health Services were not returned by press time.