Mirant slides ahead of restructuring vote deadline; Enron and Global Crossing still in picture

By Carlise Newman

Chicago, July 14 - Mirant Corp., Enron Corp. and Global Crossing Ltd. were the most active in distressed debt trading Monday, with Mirant falling lower in anticipation of the midnight deadline for its lenders to approve a critical debt restructuring deal.

Mirant, based in Atlanta, is seeking to refinance $4.9 billion of debt outside of bankruptcy court through a debt exchange offer and negotiations with its bank lenders. Both the exchange offer and extensions on bank loan waivers expire at midnight Eastern Time.

Mirant's 2003 bank debt traded "anywhere between 56 to 58" and the 2005 paper traded at 63 bid, and closed the session at 63 bid, 64 offered, a trader said. Last Thursday, the 2005 paper had been seen at 68 bid, another trader said, and he added that he had seen it trading at those levels earlier in the day Monday.

Mirant needs 85% of bondholders and all its banks to support a debt exchange plan. A $1.1 billion debt payment is due Tuesday.

A trader said there were rumors that the Atlanta energy company held a positive meeting with its banks Monday, but that it didn't seem to help matters in the distressed debt markets.

"If they had a meeting with the banks, the way the debt acted it doesn't seem like it could have been a positive one," the trader said.

If the restructuring plan is accepted by creditors and creditors are paid in full, the company has said that it believes that there will be value available for existing shareholders.

Another actively traded name was Enron. The Houston-based company filed its Chapter 11 reorganization plan and disclosure statement with the U.S. Bankruptcy Court Friday, in which the estimated recoveries are 14.4% for unsecured claims against Enron Corp., 18.3% against Enron North America and 21.3% against Enron Power Marketing, Inc.

Enron's 7 1/8% notes due 2007 were seen at 17¾ bid, 18¼ offered, a drop of one point from Friday, according to a distressed debt trader.

After the restructuring, holders of unsecured claims will receive stock in the three companies that will emerge from Chapter 11.

These are "InternationalCo", which will be named Prisma Energy International Inc. and will make up Enron's international operations; CrossCountry Energy Corp., which will hold Enron's interests in Transwestern Pipeline Co., Citrus Corp., and Northern Plains Natural Gas Co.; and Portland General Electric Co., an Oregon-based electric utility.

"Enron was definitely the issue du jour Friday. It was an active day for a summer Friday. But today [Monday] things slowed a bit," a trader said.

Global Crossing briefly rallied Monday before falling back to Friday's levels. The 9½% notes due 2009 were seen up a ¼ of a point at 5¼ bid, 6¼ offered early in the session, and then dropped the gain to end the session at 5 bid, 6 offered.

On Friday Global Crossing's unsecured creditors committee reaffirmed its support for the company's reorganization plan, in which Singapore Technologies Telemedia will acquire a majority stake in the reorganized telecom firm.

The creditors' committee said it believes that the transaction provides the Florham Park, N.J.-based telecom carrier's unsecured creditors with the best means to recoup some of their losses. Under the ST Telemedia transaction, unsecured creditors collectively will be receiving a "substantial" equity interest in a reorganized Global Crossing, the company said in a news release.

Meanwhile, Charter Communications Inc.'s debt continued to rise. Charter's 8.625% notes due in 2009 were seen at 79 bid, 80 offered, up from "the 77, 78 area," according to a trader.

"Charter was a few points better by the end of the day Friday, and they slowed today," the trader added. "Actually, it was sort of surprising, everything happened on Friday. There are guys not even back to work after taking vacations for the Fourth of July, and it was pretty busy Friday and today."

On Friday Prospect News reported that the St. Louis-based cable company intends to offer $1.7 billion of senior notes. Citigroup will lead the Rule 144A deal, according to informed sources who added that other bookrunners will likely emerge.

One market source said that some or all of the new Charter notes are expected to mature in 10 years. Another informed source reported the expectation that the deal could price during the week of July 21.

Proceeds will be used to fund the St. Louis-based cable company's tender offers for its convertible senior notes, senior notes and senior discount notes. In addition approximately $500 million of the proceeds is slated to repay bank debt.

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