Nextel Communications bank debt held its ground last week, trading in the 83 1/2-84 range after its international unit NII Holdings filed for an expected bankruptcy. The market for the name had been quoted in the 85 1/4 to 85 3/4 range in mid May, but ticked down to the 84 1/2 level after Moody's Investors Service downgraded the name two weeks ago.
Nextel will provide $115 million in funding for NII with $65 million designated as a backstop for NII's new bond issue and $50 million for a spectrum sharing agreement, an analyst explained. The spectrum sharing agreement would help to alleviate Nextel's cell splitting expenses, and therefore incrementally reduce Nextel's domestic capital expenditure, he noted. Nextel had originally stated that it would consider injecting $250 million into NII, but rescinded that offer after certain conditions were not met, according to a statement issued by the company. Dealers noted that the money put into the company was less than they expected. Calls to Paul Saleh, Nextel executive v.p. and cfo, were not returned by press time.