Nextel Communications' bank debt continues to trade up, as dealers say the credit tends to dodge problems that plague other telecom names. Nextel's hefty $7 billion deal and credit reputation has helped the paper stay liquid, and a convertible deal last week has bolstered investors. Levels on the bank debt firmed up to 95 3/4 last week, up from a recent low of 92. There were several small pieces reportedly traded. A company spokeswoman did not return calls.
A dealer said the sector has settled after a rocky ride fed on market saturation and dropping revenues. "The fact that [Nextel] raised $1 billion of additional liquidity through last week's convertible notes offering in this environment has lenders feeling reasonably comfortable," a trader noted.
The company has a $5 billion deal with four tranches and expires in 2008. Bank of Nova Scotia, J.P. Morgan Chase, Barclays Capital and TD Securities lead the deal, according to Capital DATA Loanware. The pricing on the pieces range from 2 1/2 % to 3 3/8% over LIBOR