A $5 million chunk of Burlington Industries' bank debt was swapped in the 65 range just ahead of the Holiday week following news that the company has filed for Chapter 11. Dealers report that the credit had been in the 70 range prior to the last trade. Since Burlington filed for bankruptcy, the bid offer spread has dipped to 63-67. The company makes fabrics for both the apparel and home-furnishing sectors and is based in Greensboro, N.C. Calls to Charles Peters, cfo, were not returned. Karyl McClusky, spokeswoman, declined to comment.
The company has been hit by overseas competition and the slowing economy. It reported a net loss for the past year of $91.1 million. "Views of recovery are based on the value of the brand," a dealer remarked. "It's a big textiles company--anybody with a bid is somebody who believes there's a light at the end of the tunnel. The question is whether that light is coming from the train."
Burlington reports it has $60 million cash on hand and has received a commitment for as much as $190 million in debtor-in-possession financing from J.P. Morgan.