Qwest Communications International rallied from the 58-62 level last week after the company announced that it had completed the sale of its directories business, known as QwestDex. Traders quoted the company's bank debt anywhere from the mid-70s to the mid-80s earlier in the week, and trades were rumored to have been completed in the 80-82 range by week's end.
The bonds have been very volatile, one trader noted, explaining that technical pressures that came from investors buying the bonds on the rally and selling them quickly afterwards to make a profit had actually left bond levels unchanged or even lower than where they were before the news came out. Dealers said they were pricing the bank debt in consideration of where the bonds were trading and using current valuations as a result of the announced sale.
Meanwhile, Qwest is still trying to secure a new credit facility via Bank of America and amend an existing $3.4 billion line. The company originally was looking to obtain the new credit at the QwestDex level but, in an earnings call earlier this month, Oren Shaffer, cfo, said Qwest would look to roll the new credit into another security agreement if the sale of QwestDex was completed. A spokesman said the company is continuing negotiations on both credit lines.