Global Crossing better bid on narrower monthly loss; Charter soars on financing rumors

By Carlise Newman

Chicago, May 30 - During a surprisingly busy Friday session in distressed debt trading, Global Crossing Ltd. emerged as one of the more active names after the company posted a narrower monthly net loss.

The bankrupt telecommunications company said its net loss for April was $75 million compared with $89 million in March. Its revenue for the month fell slightly to $228 million from $231 million in March, but that did not seem to affect the battered company's bonds.

Global Crossing's bonds were seen moving from 5 bid/6 offered to 5¾ bid/6¾ offered, a trader said.

"Not bad," he added.

Global Crossing said it ended the month with a cash balance of $584 million. The Florham Park, N.J.-based company filed for bankruptcy protection in January 2002 with $12.4 billion in debt and $22.4 billion in assets.

Meanwhile cable operator Charter Communications was soaring on financing rumors, traders said. As previously reported, rumors began circulating Thursday and were followed by more rumors and news reports Friday saying Charter had asked senior lenders to approve a corporate structure to allow a previously announced transaction under which Microsoft Corp. co-founder Paul Allen will lend it $300 million.

Allen, Charter's chairman and largest shareholder, agreed last month to lend the nation's No. 3 cable operator $300 million to bolster its financial condition.

Charter's 8 5/8 notes due 2009, which opened at 72.5 bid/73.5 offered, gained another three points by the end of the session to close at 75.5 bid/76.5 offered.

"Charter was flying, has been flying for the whole week, but today was a pretty good move," a distressed debt trader said.

On Friday, the company held a conference call with some senior lenders to discuss the plan, which calls for the creation of a new corporate entity that will borrow the money from Allen, the reports said.

Also boosting the debt was news of an asset sale. On Thursday Charter agreed to sell its systems in Port Orchard, Washington to WaveDivision Holdings LLC in a deal valued at $91 million.

The St. Louis-based company said it expected the sale to close by the year-end.

U.S. Unwired was reportedly very active and better bid Friday, with its bonds in the "high 30s across the board" up from previous levels of 35 bid/37 offered in recent days following news that the company's exchange offer has been rejected by noteholders.

Late Thursday holders of more than 50% of the company's 13.375% senior subordinated notes said they will not participate in the company's exchange offer. The holders also said they have formed an ad hoc committee, signed a lock-up agreement and hired Chanin Capital Partners as financial advisors and Orrick, Herrington & Sutcliffe as legal advisors.

U.S. Unwired announced the exchange May 15, saying it intends to offer a combination of cash and new senior notes for any and all of its $400 million face amount of 13 3/8% senior subordinated discount notes due 2009.

The Lake Charles, La.-based owner of five Sprint PCS affiliates said it would exchange $187 in cash and $185 face amount of new notes per $1,000 face amount of the existing notes.

"U.S. Unwired did pretty well today," said a trader. "It was strange, the day was pretty hopping for a Friday. Maybe the rain kept people from golfing."

Meanwhile Mirant Corp.'s debt did not fare as badly as expected after the company said it obtained an extension on its credit agreement until July 14.

Mirant's 7.2% notes due 2004 were seen falling half a point from Thursday, to at 85 bid/88 offered, according to a trader. Mirant's bank debt was quoted unchanged at 71½ bid/74 offered.

"It wasn't much of a move. The aggressive bids dropped a bit, but that was about it," a trader said.

The extension waiver includes a provision that limits the future use of letters of credit to existing beneficiaries and no more than current amounts.

The Atlanta-based energy company said in a news release it continues to be in discussions with its creditors regarding its financial restructuring. The company is currently unable to provide additional details associated with those discussions or the terms of its waiver agreement.

Earlier this month, Mirant said it was willing to offer "substantially all its unencumbered assets" as security and to agree to more stringent borrowing terms in order to restructure about $5.3 billion in debt.

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