The bank debt of Nextel Communications bounced back up to the 88 level, with a trade taking place last Tuesday. Dealers said the name was stronger because of the rally in the equity markets early last week. Later, however, the paper lost momentum and trades were quoted at 87 5/8 and 87 1/2 by week's end.
Two weeks ago, the paper had slipped to the 84 1/2 85 1/2 level after a J.P. Morgan report stated that Nextel did not correctly account for its bad debt expense and its customer churn rate (LMW, 10/14). But the company rebutted the analysis, claiming that it relied on a "over-simplified model and erroneous assumptions."
Still, market players continue to have mixed feeling about the name. Some point to Nextel's recent strong performance, but others continue to cite weaknesses in the company's business plan going forward. A financial official at Nextel could not be reached by press time.