A $45 million auction of Crown Cork & Seal went off in the 88 range this week after the company was said to have received an extension to its term loan that was set to mature on Aug. 4. An original lender was rumored to have sold the name, taking the opportunity of an up tick to reduce exposure to the company's bank debt. The name took a hit last week as news was released that the company would be unable to complete the spin-off of Constar International because of a weak equity market. Calls to company officials were not returned by press time.
Market players were disappointed by the low reported bids from Hutchinson Whampoa and Singapore Technologies Telemedia and BANK ONE's private equity group for Global Crossing this week. "On Global it's a lot of pain to take," said one dealer. The bank debt is quoted in the 15-17 context, but traders said there have not been any trades since the news came out.
In other loan market news, Governor George Pataki has signed the amendment to the New York State of Frauds Amendment. This amendment legally binds loan market players to oral agreements. "You are legally bound to close the trade if you reach an agreement on the phone," explained Jane Summers, general council for the Loan Syndication and Trading Association. The amendment will become affective in 60 days.