WorldCom is the topic of conversation as market players speculate on how the company will treat its $2.65 billion, 364-day facility with term-out option. Many dealers believe that the company will draw down on the $2.65 billion, 364-day credit facility with term out option and then begin its negotiation process. The market for the paper rose last week to the 80s from the 60s-70s level as the market expects it will negotiate a $5 billion credit facility.
Some investors feel that that they are too exposed to the company already, others believe if the company puts up significant collateral to back the loans the credit will go through. Levels on the company's $3.75 billion, multi-year revolver were quoted as low as 93 but rose to the 95-98 range last Friday. Spreads were wide as investors gamble on the paper, which the company states will be taken out, but investors fear could be drawn if the company decides to file for bankruptcy before maturity. A company spokesman could not be reached by press time.