Confusion reigned over the status of Mediacom Communications' new bank debt, as the deal reportedly broke for trading and then was halted by agent J.P. Morgan three hours later last Tuesday. "I've never seen this done with a deal that hasn't traded yet," said a confused trader about the halt in action. "I didn't even know it could be done. It usually happens when there's an amendment to a credit." A J.P. Morgan spokeswoman declined to comment. Rocco Commisso, ceo of the cable company based in Middletown, N.Y., did not return repeated return calls for comment.
Many traders said they were unsure where the credit stood and were unaware of any stop-and-go action in the name. One trader said early levels on the name were a little over 99 to 100 1/4 , but no trades were reported. There was speculation that the wrapping of syndication--and the break for trading--may have been choppy because of changes made to the credit just ahead of the holiday week.
The credit was well-received in syndication, as the original $400 million target was upsized to $500 million after it attracted $1.1 billion in commitments. Meanwhile, the pro rata was cut back to $60 million from $100 million. There was also a price flex-down, dropping 1/4% to LIBOR plus 2 1/2 %. "The rumor was some people opted out at that point," a banker said, adding that some institutional investors got upset.
Traders are interested in the paper. Even under the spell of a slowing economy cable deals have traded relatively well, with traders noting the recession-proof nature of the industry. "It's like the utilities or water. People always want their cable," a dealer has said. A trader commented there's some appetite for the paper, but that it's "not overwhelming." He added that since the deal broke--or didn't break--on July 4th week, market players may have been distracted. "The market is dead right now. You won't really be able to tell until next week," he said.