Nextel trades at 97 5/8 in sluggish secondary; El Paso holds steady following earnings news

By Sara Rosenberg

New York, March 31 - Nextel Communications Corp. was one of the only names seen trading in Monday's quiet secondary bank loan market, according to market sources. The term loan B and term loan C traded at 97 5/8, basically flat with Friday's levels.

On Friday, the Reston, Va. mobile phone company was active and stronger by about a point on news of a $5 billion shelf filing, which sparked speculation the company may be about to refinance debt. Nextel did not return a call seeking comment. The shelf covered the possible issuance of debt securities, preferred stock, class A common stock, depositary shares, warrants, purchase contracts, units and trust preferred securities. Proceeds would be used for expansion, strategic investments, working capital, debt service and other general corporate purposes.

Meanwhile, El Paso Corp.'s new bank debt was basically flat on Monday with quotes around 99 to 99¼ following the release of fourth quarter and full-year 2002 earnings, according to a trader.

For the fourth quarter, the company reported a net loss of $1.736 billion, or a loss of $2.92 per diluted share, compared to earnings of $375 million, or 72 cents per diluted share, in the fourth quarter of 2001. On a pro forma basis, the company reported a fourth quarter 2002 loss of $407 million, or a loss of 69c per diluted share, compared with earnings of $412 million, or 79c per diluted share, in the fourth quarter of 2001.

"The events of 2002 created significant challenges for El Paso, but we have taken and continue to take the steps necessary to strengthen our financial position and preserve the value of our core businesses going forward," said Ronald L. Kuehn, Jr., chairman and chief executive officer, in a news release. "In 2002, we sold almost $4 billion of non-core assets, and reduced expenses by $300 million.

"We also took a number of important steps to enhance our liquidity. On Feb. 5, 2003, El Paso announced a five-point business plan designed to build on last year's progress. I am pleased to report that our 2003 non-core asset sale program is on schedule, with more than 50 percent of the $3.4 billion program either completed or under contract. The company's liquidity has strengthened materially over the past 60 days due to the progress on asset sales and the financings that we have completed. The recent announcement of an agreement in principle to resolve the principal litigation and regulatory proceedings concerning the Western energy crisis is an important step for the company as this settlement will remove a major source of uncertainty. In addition, we are working diligently to complete an extension of our $3 billion bank facility," Kuehn said in the release.

The company is currently working towards amending its $3 billion 364-day revolver and $1 billion multi-year facility (see story elsewhere in this issue for further details)

For 2002, the company reported a net loss of $1.467 billion, or a loss of $2.62 per diluted share, compared to earnings of $93 million, or 18c per diluted share, in 2001. On a pro forma basis, the company reported full-year 2002 earnings of $361 million, or 64c per diluted share, compared with earnings of $1.729 billion, or $3.31 per diluted share, in 2001.

As of March 28, the Houston provider of natural gas services had $3 billion of available cash and lines of credit.

D&K Healthcare Resources Inc. closed on a new $600 million four-year revolving credit facility with an interest rate of Libor plus 225 basis points and a 3/8% commitment fee. Fleet Capital Corp. served as lead arranger on the new facility.

The new revolver replaces the company's $230 million revolver and a $200 million accounts receivable securitization program.

"With this new credit facility we are significantly increasing our financial flexibility," said J. Hord Armstrong, III, chairman and chief executive officer, in a news release. "The additional borrowing capacity provided by the new facility will help us continue to broaden and grow our business. We appreciate the long term relationship we have enjoyed with Fleet Capital and the support they provided on this transaction."

"By working closely with company management, we were able to structure a sizeable loan that met the needs of a valued client," said Fleet Capital senior vice president Allan Allweiss, in the release.

D&K Healthcare is a St. Louis drug distributor.

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