Traders said no one was willing to step forward and trade Tyco International's bank debt last week as bid/ask spreads were too wide for a deal to be struck. Bids were thrown out at 94, but speculation that there is upside in the company kept sellers from unloading. "The loans are being quoted but no one is letting go of them," one trader commented, despite all of the talk the company has caused over the last couple of weeks. One piece of Tyco that is trading, however, is the credit protection. One dealer noted that last year an investor could buy credit protection for roughly 150 basis points per annum and now it's trading between 525 basis points and 575 basis points. Some market players are concerned that the multi-industry conglomerate may be the next big fallen-angel, but one trader noted that there has been no change in its ability to service its debt.
Market Locked On Tyco Uncertainity