The market is still shaken and stirred on Washington Group's announcement earlier this month that it may have to file for Chapter 11 bankruptcy protection. Early last week the bank debt traded at 60-61, then hit a low of 55. "There's still a lot of uncertainty of how things will shake out with Raytheon," a dealer said, citing the legal snare between the two companies after Washington Group bought out the construction and engineering arm of Raytheon. "Everyone's pointing fingers, and it's very difficult at this point to figure out what's going on."
Washington Group signed a new credit facility last July, which was initially viewed as a par name. "It traded at par 1/4 two days before the announcement. The next trade was at 65," a dealer said, noting the plummet. Dealers said there was a bank meeting a little more than a week ago, but details could not be determined by press time. "The list of holders is hard to get, because the agent banks have kept that concealed," said a market player. A company spokeswoman did not return calls.
Washington Group, formerly Morrison-Knudsen Corp., has a $1 billion credit facility which breaks down into two tranches. It expires in 2005 and is priced at 200 basis points over LIBOR. Bank of Montreal, Bank of America and Credit Suisse First Boston are the lead arrangers. Spokesmen at all banks did not return calls.