A $10 million piece of Harnischfeger Industries' bank debt traded up slightly last week at 42 due to the company's restructuring and rumored escape from Chapter 11 bankruptcy. "They're coming out of bankruptcy in the next couple of months," one trader said. Another discounted that reasoning. "Everybody's known that for a while," he said. "They're trying to restructure, and they did well on their numbers." Calls to the Milwaukee, Wis.-based company were not returned.
A market watcher said the company, which provides equipment for paper processing, stumbled in 1998 when an Asian paper company defaulted on its contract with Harnischfeger. "Their downfall was the combination of a big slowdown in Asia and the fall in commodity prices," he said. "There was a time when they were one of the big investment-grade companies, but they lived off their reputation."
Harnischfeger has a $750 million facility which breaks down into three tranches. It is priced at 23⁄4% over LIBOR. J.P. Morgan Chase leads the deal, according to Capital DATA Loanware. A spokeswoman declined to comment.