WorldCom's bank and bond levels narrowed to the 20-22 level after Qwest Communications International announced that it was the center of a criminal probe. Dealers still maintain that the company's bank debt has not yet changed hands since it plummeted last month, although rumors of trades still continue to circulate around the market. "It's a train wreck if anyone were to trade it down there," one dealer said.
The company's bank debt is most often quoted alongside its January 2003 and May 2003 bonds. The bonds had been trading in the 19-24 range, up from the mid- to low teens, as investors were hopeful that discussions between the company and its lending banks would result in a secured deal that would keep the company out of bankruptcy.
Reports indicate that the company is in negotiations for a $3 billion secured senior bank line that could possibly roll in the existing $2.65 billion line, but the potential for that deal does not seem to be affecting the bank paper. A spokeswoman for WorldCom said bank negotiations are ongoing and that the company expects proposals within the week. A decision concerning the company's potential restructuring will be decided upon within the next three weeks, she added, declining to comment on how a July 15 bond interest payment would be handled.