Levels on the bank debt for Pacific Crossing, the bankrupt affiliate of Global Crossing, have dropped in the wake of a cash distribution that paid off some bank debt. The debt was trading in the 8-9 context before the company distributed some of the cash off its balance sheet to bank lenders, one market source explained. The bank debt is now worth roughly 6-8 cents on the dollar, he added. One dealer explained that the price was up because lenders were expecting a paydown. It dropped because the debt that wasn't paid off was worth less. When the paydown was distributed and how much each bank debt holder received could not be determined by press time.
The company is a majority-owned subsidiary of Asia Global Crossing and filed for bankruptcy in July. At that time the company had a $700 million senior secured bank facility that was used to finance the construction of the PC-1 system, a fiber optic system that spans the Pacific Ocean. Calls to Stefan Riesenfeld, Asia Global Crossing cfo, were referred to a spokeswoman who did not return them by press time.