Owens-Corning's bank debt ticked up last week, with $30-35 million trading at 70-71 as market players continue to speculate on the effect that subsidiary guarantees will have on the payback bank debt holders receive from the bankrupt fiberglass company. Between $20-25 million traded last Monday at 70 and by midweek roughly $10 million more in trades had moved the name to the 71 level. One trader explained that some of the company's subsidiaries held patents and are entitled to a stream of royalties. The guarantees suggest that bank creditors would be entitled to these proceeds and other subsidiary value.
In its November 10-Q, the company stated that it was unable to predict the treatment of guarantees issued by the company's U.S. subsidiaries, including Owens-Corning Fiberglas Technology, and OCFT's intellectual property license agreements with respect to the bank debt. Calls to Michael Thaman, senior v.p. and cfo, were referred to a spokesperson, who did not return calls by press time.