Crown Cork & Seal was a popular credit in the secondary market last week, with dealers citing trades of the company's revolver in the 88-89 context. One analyst said investors were pleased that the company was able to pay down $234 million in notes due Sept. 1, as there was some concern that the company would not be able to handle its 2002 maturities. The paper rallied from the 85-87 range, where it had been languishing at the end of August, according to LoanX.
Crown Cork pulled its spin-off of Constar International, a food and beverage container company, after encountering weak equity markets in early August. "People are optimistic that if the bond market continues to get inflows and the equity markets stabilize, they can [spin off] Constar and the banks will get some pay downs," one trader said. The spin-off is an important part of the company's plans to reduce its debt to $4 billion by year's end as proceeds from the initial public offering are earmarked to pay down debt (LWM, 8/4). Calls to Timothy Donahue, senior v.p. of finance, were not returned.