RCN's bank debt jumped last week with $30 million trading as the market buzzed with word that the company will pay down approximately 25% of its outstanding bank debt. About $25 million traded at 80, up from 70 earlier in the month, with PNC Bank reportedly involved in the deal. A spokeswoman for the bank declined to comment. Earlier last week, $5 million changed hands at 78.
It could not be determined how RCN, a fiber optics services company, would take out the existing debt. The company is currently in negotiations with lenders for an amendment to its credit agreement. The amendment would seek to "accommodate a revised business plan, which incorporates a slower growth trajectory focused on the development of the company's business in existing markets without expansion into new markets," according to a report from Standard & Poor's. The rating agency downgraded RCN from B to CCC+ at the beginning of March citing increased business risk. The name is currently on creditwatch with negative implications due to liquidity concerns and pending the completion of lender discussions. Calls toTimothy Stoklosa, executive v.p. and cfo of RCN, were not returned by press time.