Wireless names have firmed up in the secondary loan market in the path of industry-bellwether Nextel Communications, which has crawled up roughly 10 points over the last month and was trading at trading at 88 1/4 this week. Traders said a study that claimed cell phone usage would double by 2006 also contributed to the positive run. The source of this research could not be determined.
Following suit, Western Wireless climbed into the high 60s from the low 60s, where the paper had been quoted last week, according to LoanX. Rural Cellular also firmed up a touch, sitting solidly in the 80-83 context. No trades could be confirmed for Western Wireless or Rural Cellular. Calls to Theresa Gillespie, Western Wireless cfo, were not returned and calls to Wesley Schultz, Rural Cellular cfo, were referred to a spokeswoman who could not be reached by press time.
Centennial Communications was said to have traded in the 67 1/2 context, which is flat from were it was trading last week. The paper was said to have rallied after the company disclosed in its Aug. 29 10-K that Welsh, Carson, Anderson & Stowe, one of the company's largest shareholders, bought roughly half of the company's 103/4% subordinated debt (LMW, 9/16).
American Cellular was the anomaly in the wireless sector. The company announced at the end of its second quarter that it was not in compliance with its total debt leverage ratio, which according to its Aug. 14 10-Q ranges from 7.75 times to 9.25 times for this fiscal year. There has been no word what the company plans to do to reconcile its violation and investors are thirsty for information. The company is a joint venture between AT&T Wireless and Dobson Communications, which also manages the company. Calls to Bruce Knooihuizen, Dobson cfo, and Richard Sewell, Dobson treasurer, were not returned by press time.
LoanX quoted American Cellular's term loan "B" bid/ask spread at 66 1/2 to 69 5/7 with a market depth of seven, but a couple of traders expressed skepticism that the paper should be pricing so high on account of its current non-compliance. One trader quoted the paper in the 60-65 context.