Global Crossing's bank debt reportedly traded up three points to 45 last week following an announcement that the company is selling a business unit for $160 million. The company is selling its IPC unit to an investment group led by Goldman Sachs. "It's considered a slight positive to flat," commented a dealer. "It depends on the cash flow you're taking away. Even if you bring in a certain amount of cash, you must allocate it to pay down debt. At the end of the day your net equation is how much cash flow you're taking away vs. how much you're reducing your debt." Calls to Dan Cohrs, cfo, were referred to the company's media relations office. A spokesman did not return calls by press time.
Two weeks ago approximately $50 million of the debt changed hands in the 42 range following an announcement of a dramatic earnings loss and the likelihood that the company will soon break a covenant in its loan agreement (LMW, 11/19). Global Crossing has a $3 billion deal that expires in 2004. Pricing on the revolver is LIBOR plus 2 3/4 %. J.P. Morgan, Goldman Sachs, Deutsche Bank, Citigroup, Merrill Lynch and CIBC World Markets are the lead arrangers.