Several asbestos credits took a big jump last week, with dealers reporting more investor comfort with the liability issues surrounding these names. Crown Cork & Seal traded at 87 1/4 to 88, up from the mid-80s; Owens Illinois traded at 93 1/2 to 94 1/2, up from the 92 range; and U.S. Industries traded at 83, up from the high 70s. "The (liability) numbers have stabilized and investors are more comfortable with asbestos risk," a dealer noted. Another dealer said the strong fundamentals of Crown Cork gave the sector a boost, yet he cautioned that the names could trade back down in sympathy with the anticipated Chapter 11 bankruptcy filing of Federal-Mogul. Crown Cork secured a $400 million term loan in the wake of lowered ratings related to the company's asbestos exposure (LMW, 3/18). Calls to a spokesmen for Federal Mogul and Owens Illinois were not returned by press time. Calls to Timothy Donahue, senior v.p. finance at Crown Cork, also were not returned.
Asbestos credits began to trade back in favor early this spring, when Owens Illinois' revolver traded at 901/4 (LMW, 5/12). Crown Cork & Seal traded the same week at 85.