Dresser's credit has stayed afloat in a market with sinking levels, with about $5 million of the paper changing hands last week around 100. "It's got good diversity and a good coupon," said a dealer, explaining why the paper has held up despite other steady names, such as Nextel Communications and Charter Communications, losing footing. Nextel has dropped from the low 90s to the mid-80s and Charter has softened to the mid-90s from the high 99 range. Buyers and sellers active in Dresser could not be ascertained.
"It's also got free cash flow and there's not as much technical pressure on the name," said a dealer, noting that there aren't many sellers of the name. Dresser is a gas equipment services company based in Dallas. Calls to Dale Mikus, cfo, were not returned. Stuart Yee, director of corporate communications, was traveling and could not be reached for comment. The credit has stayed in the 100 range, dropping from 101, where it stayed throughout the summer. "Nobody's willing to pay too far over par," said a dealer, adding that Suiza Foods' debt came down to 100 1/4 from the 101 range.
In June, Dresser's term loan "A" traded at 1013/ 4 while the "B" traded at 101 1/2 and dealers cited the company's Ba3 rating and industry sector (LMW, 6/3). Market sources say it's been smooth sailing for the credit from the beginning. In March, Dresser's $820 million credit was blown out to $1.5 billion when it was in syndication. The company's credit facility breaks down into three tranches and expires in 2007. Credit Suisse First Boston and Morgan Stanley are the lead arrangers. Pricing ranges from 265 basis points over LIBOR to LIBOR plus 41/ 2%.