Tenneco Automotive's bank debt began to crossover to the par side with roughly $2 million trading at 92 in the street last Thursday. The name has jumped from the 86-87 range where it had been trading two weeks ago following an amendment to the company's credit agreement. The modification provides for increased financial flexibility including the freedom to exchange subordinated notes for equity. The company is also permitted to conduct sale or lease back transactions of up to $200 million with proceeds going toward the prepayment of part of its bank debt. In exchange for the amendments, the company has agreed to pay an additional LIBOR spread of 25 basis points and reduce the size of its revolver by 10%.
The credit facility had been amended in March 2001. It comprises a $500 million revolver, a $406 million "A" term loan; a $270 million "B" term loan and a $270 million "C" term loan. Pricing on the credit ranged from LIBOR plus 3 1/4 % to 4% before the amendment and J.P. Morgan leads the deal. Calls to Mark McCollum, senior v.p. and cfo of Tenneco, were referred to a spokeswoman, who did not return calls by press time.