The bank debt of Crown Cork & Seal received a boost from its latest positive earnings last week, as well as the confirmation that the company would go ahead with its spin-off of Constar International. The company posted net income of $0.34 per diluted share last quarter, compared to a loss of $0.10 per diluted share during the third quarter last year. The bank debt rallied from the 85 level and was trading in the 87 1/2 - 88 1/2 range following the news. Calls to Timothy Donahue, senior v.p. of finance, were not returned by press time.
The initial public offering of Constar has been revised to 12 million shares with a price range of $15-18 per share. The finance package backing the spin-off also will include a $150 million term loan and up to $200 million in senior subordinated notes due 2012, according to the company's announcement. Proceeds from the term loan, common stock and senior subordinated notes will be used to pay down Crown Cork's debt. The road show for the offering of stock and bonds is expected to begin next week.