Bids for Finova Group's bank debt jumped up 10 points last week as word that General Electric Credit Corp. and Goldman Sachs were looking to take control of the company seeped into the market. LMW first reported the play for Finova on its Web site last Thursday, at which time a $10 million piece of the credit had reportedly traded in the range of 80. That trade could not be confirmed, but traders said bid levels on the paper were that high. Calls to Finova officials and a GECC spokeswoman were not returned. A spokeswoman at Goldman declined to comment.
While word of a move on Finova circulated last week there was confusion over who was teaming with Goldman. Some traders said General Motors' General Motors Acceptance Corp. (GMAC) was the one working Goldman. By late afternoon, however, it became clear that it was GECC homing in on Finova.
Late last year Finova's levels fell to the mid-60s, with dealers citing the loan losses in the company's portfolio as the cause (LMW, 12/17). Yet the new year brought renewed confidence, with company's credit experiencing an uptick in levels to the 70s range. Dealers cited investor Warren Buffett's interest in the company's debt. Finova has about $4.6 billion in credit facilities, with $1.6 billion slated to expire this May. Citigroup leads the deal. Calls to a bank spokesman were not returned.