Roughly $15 million of Exide Technologies' bank debt traded up to the 69-70 level from 62-64 last Tuesday following the company's bankruptcy filing. The real driving force behind the trades was the timing of the filing and not the actual filing itself, which had been expected for months. Dealers explained that bank lenders would be entitled to collateral in certain foreign and U.S. subsidiaries if the company filed after April 12. The company's move to bankruptcy last Monday ensures banks will get that collateral, making the debt more attractive.
Banks extended two waivers -- one at the end of March and one in early April -- on interest and amortization payments to prevent the company from defaulting on the bank debt. By last Wednesday, the market for the name rose as high as 70-73.
The battery maker's bank debt dropped roughly 10 points to the 66 level early in March from the mid 70s as investors grew worried about covenant resolutions. At that time dealers speculated on the imminent bankruptcy filing (LMW, 3/11). Calls to Joel Weiden, the company's spokesman, were not returned by press time.