Traders said Finova Group's bank debt last week hit its highest level year-to-date, trading between 94 and 94 1/4 and remaining steady after news was released regarding approval of the company's new reorganization plan. The paper had been trading in the low 90s. "[Finova] traded up a lot on the positive news of the settlement. It takes a lot of the uncertainty out of the credit," said one trader. "We were all waiting to see what happened [August 10]," said another. It could not be determined how much of the paper traded last week.
The new reorganization plan will enable the company to come out of Chapter 11 and allow for a takeover by Berkshire Hathaway and Leucadia National. The plan was supported by 99% of the company's creditors. Under the plan, Berkadia will lend Finova $6 billion to pay creditors 70 cents on the dollar in exchange for a 50% equity stake in the company.