Allied Waste bank debt moves up on news of bond sale

By Sara Rosenberg

New York, Nov. 12 - Allied Waste Industries Inc.'s bank debt rallied slightly Tuesday on news of a proposed bond sale - completed late in the day - which will be used to reduce bank debt.

The company's bank paper was quoted up by ½ to ¾ point at 97¾ bid, 98¼ offer.

Allied Waste North America Inc., a wholly-owned subsidiary of Allied Waste Industries, announced plans to sell $250 million in senior notes due 2012 and upsized the offering at pricing to $300 million. Proceeds from the sale will be used to repay portions of the company's senior secured term loans A, B and C, which would reduce debt maturities in 2003 by about $90 million.

Furthermore, the Scottsdale, Ariz. waste services company affirmed its previous 2002 financial guidance, including EBITDA of approximately $1.75 billion, free cash flow of approximately $350 million and total debt below $8.95 billion.

Meanwhile, Wyndham International Inc.'s bank debt "continues to settle" at around 70½ bid, 74 offer, a trader said. The bank debt didn't see much of a change from Friday's levels, which were characterized as the low 70s, despite news of lower-than-expected earnings.

On Tuesday, the Dallas hotel enterprise reported third quarter results including revenue of $386.8 million, down from $388.6 million in the third quarter of 2001 and EBITDA of $61.1 million. Net loss per common share was 68 cents for the quarter compared to analyst estimates of a net loss of 51c per share.

Other recent company news includes the announcement of some additional asset sales on Friday. The company sold the Ramada Inn and Conference Center in Nashville to a joint venture between Montclair Hotel Investors and Oaktree Capital Management for $8.4 million. Proceeds from the sale are being used to pay down debt.

"It's only $8 million," a trader previously told Prospect News, explaining that the net proceeds are too small to affect the secondary trading levels of the company's bank debt.

Tenet Healthcare Corp.'s multi-year tranche bank debt stabilized somewhat on Tuesday at 87 bid, 90 offer, compared to Friday's bid/offer around 85/90. "I haven't seen any actual trades on it," the trader added.

The company's bank debt saw a dramatic drop from quotes in the high 90s due to recent news of management changes, lawsuits and audits.

"The bid in the hospital sector has probably softened a little bit based on Tenet," another trader told Prospect News.

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