Nextel Communications' levels are back on the upswing, trading up to 91 5/8 then hitting 93 5/8 by the end of last week. Dealers noted a few $5 million trades that totaled a modest amount and pushed the debt up about three points over two weeks. There has been a steady progression for Nextel over the last month, ever since recently bottoming out in the high 70s.
Dealers noted the credit now has a few factors working in its favor. First, a slow primary market is putting investor attention into secondary names, and Nextel--because the credit is so liquid--is considered a safe bet. Second, dealers credit a strong high-yield market and the fact that Nextel's subsidiary, Nextel Partners, recently completed a successful bond deal. "There's not a lot of paper out there, and Nextel is a good name, a good credit. That's what's ultimately driving it," a dealer said. Alice Kang, spokeswoman for Nextel Partners investor relations, explained that the bond deal would be used to expand the company's network. Nextel Communications' customers would also get a broader network, since the two are linked.