Levels for Buhrmann's bank debt have been put under pressure since the company announced that it is withdrawing its prior earnings forecast due to the uncertain economic climate. The market for the company's term loan "B" has slumped about one point to the 97-98 range, although traders said no paper had changed hands. The company's U.S. revolver was quoted in the 90-92 range.
Confronting the weakening economy and lower-than-expected sales in the third quarter, the office supply company has pulled its guidance for the fourth quarter and will not issue another forecast for this year. Despite the weaker numbers, Buhrmann expects to stay in compliance with its bank loan covenants.
Market players discussed the effect of the earnings revision on management's credibility, noting that this wasn't the first guidance change. In a company statement, Buhrmann said it is undertaking a restructuring and cost-reduction efforts to help combat the current economic climate.Mark Hoffman, cfo, could not be reached by press time.