The March 31 fiscal year end for Japanese banks was said to be the driving force behind a $10 million auction for Crown Cork & Seal's bank debt held last Thursday. "The Japanese banks are just looking to purge [underperforming credits] right now," a banker noted. On Thursday the debt traded slightly higher than 85, a surprise to some since it had been offered in the 84 range. "There's strong bids in the distressed market right now," a dealer said. "At the end of the year, most want to sell, which pushes prices down. People then want to buy back at the beginning of the year." The same seller also reportedly held a $37 million auction for Pacific Gas & Electric paper, trading it at 96 1/2.
The debt has been in the 84-85 range since last December, after steadily trading up from the high 70s. Traders credit a stronger overall market as helping to support the paper. Last spring Moody's Investors Service assigned a B3 rating to the company's new $2.5 billion revolver due to uncertainty over future asbestos claims payments (LMW, 5/13). J.P. Morgan and Société Générale are the lead arrangers. The facility has a five-year maturity and is priced at LIBOR plus 31/2 %.