Warnaco has seen a lot of action in the secondary market over the last two weeks with more than $60 million changing hands, according to dealers. The name has been trading flat at the 30-32 level. Traders said better company performance has caused the recent activity in the name. Market sources also said the ultimate recovery value for the bank debt is deemed to be as high as 40.
Bank debt levels have not climbed closer to 40 because investors are still unsure of when the payout will be made. The company is currently working its way through a bankruptcy restructuring process and will most likely emerge as a stand-alone company at the end of this year (LMW, 6/3). Calls to Jim Fogarty, cfo, were not returned by press time.