Dade Behring's bank debt is flying high in the 109-110 range with $10 million trading on Wednesday, as investors gauge the value of a potential debt to equity swap. Two weeks ago the name had been priced in the 105-106 context. The company has been in negotiations with lenders, bond and equity holders for some time, but traders now speculate that an agreement is in the offing. A spokesman for Dade Behring confirmed that the company is continuing "productive negotiations," but said no agreement had been reached. He also noted the company's recent strong performance.
Dade Behring's bank debt has been feeling a boost from speculation of an equity play since last July, when the name jumped 10 points to 80. "If they restructure, banks are getting equity. Whoever's a holder will have equity, and the equity will be worth more," a market player explained at that time (LMW, 7/01).