Kmart's bank debt climbed last week from a high of 68 two weeks ago to the 70-71 range by last Wednesday withDeutsche Bank rumored to have participated in a $15 million trade on Tuesday. After a strong week, the name dipped slightly to 68 1/2 last Thursday with a $5 million piece trading. Buyers and sellers on Thursday's trade could not be determined by press time.
Explaining the midweek activity, one dealer said those who bought the credit when it hit the low 50s range are looking to make a quick profit by selling now. Two weeks ago, $50 million of the name traded up from 53 to 64-66 range before ticking up to 68 by week's end on rumors that the company's bank debt will be secured by guarantees provided by subsidiary businesses (LMW, 2/18). Some traders speculated that trading will slow down on the name until it hits the mid-70s as many think there is more upside to be had. "When it reaches this level, dealers who have been holding on to the name might choose to sell," one trader said. Calls to the company were not returned by press time.