Charter Communications is the talk of the loan market this week, following the company's announcement that its chief operating officer, David Barford, was placed on paid leave due to the pending status of a grand jury subpoena. The bank debt traded in the 81 1/2 - 82 1/4 context, although traders noted that trading was thin as market players got comfortable with the news. At these levels, some distressed funds are starting to look at the name, some traders added. Calls to Kent Kalkwarf, cfo, were not returned by press time.
The bank debt of Express Scripts traded at 99 in the Street following reports that Aetna will be terminating its pharmacy contract with the company. The paper had been trading in 99 3/4 context prior to the news. Traders predicted that the paper was likely to come under pressure in the future, as some noted that its slim spread of 2% over LIBOR does not justify its current price. Calls to George Paz, cfo, were not returned by press time.
Traders said Nextel Communications was a touch stronger this week, with the market for its bank debt quoted at 88 - 88 1/2 in anticipation of the company's earnings release. "Historically, they've always beat expectations," one dealer said. Calls to Nextel were not returned by press time.
The $30 million piece of Conseco's bank debt that had been shopped last week finally traded around the 57 level on Tuesday as the company announced that it would put its finance division up for sale. One trader suggested that the sale of the finance division would be positive for the company and possibly offer some recovery value. In contrast, the paper seems to have traded down from the 58-61 range, where it was quoted last week. "It's pretty volatile," one trader said. "It's been bouncing around in the 55-65 context." The buyer and seller of the $30 million piece could not be determined.