Mirant moderately higher; Fleming trades for two days straight; Global Crossing loses momentum

By Carlise Newman

Chicago, July 22 - In an otherwise subdued trading session, Mirant Corp., Fleming Cos. and WorldCom Inc. emerged as the bright spots in the distressed debt market Tuesday.

News that an emergency order by the court would halt Mirant creditors from trading shares or claims did not have much of an effect on the company's bonds.

Mirant TIERS were up at 42 bid, 44 offered, one point higher than Monday. The 8.3% notes due 2011 were last seen 75½ bid, 77½ offered, a rise of a half-point.

The court order stated those holding claims against Mirant over $250 million and shareholders owning 4.75% of Mirant's stock are prohibited from selling or trading shares or claims until the bankruptcy court can consider Mirant's request to establish a notice procedure regarding trading of shares and claims (see story on page one of this issue).

The Atlanta-based energy company also requested that the court establish a procedure for the imposition of sanctions for violations of the notification requirements.

The order prevents potential trades or claims of stock that could hurt Mirant's tax benefits, which are currently $1 billion and could get as high as $2.5 billion by the end of the year. The tax losses may result in future tax savings of $200 million to $400 million.

"Like the rest of the market, Mirant was quiet," a trader said. "The fireworks are over for now."

Fleming was back in the picture again Tuesday. The 9¼% notes due 2010 were seen trading at 133/4, a trader said, and later at 14 bid. They closed the session at 14 bid, 15 offered.

There was no news on the grocery store operator, which has been floundering in bankruptcy since April.

"They've been at the same levels for months now. There's really nothing going on but they traded pretty actively Monday and today," a trader said.

Last Thursday, the company obtained court approval for the sale of its grocery wholesale operations. Fleming and C&S Wholesale Grocers Inc. signed an asset purchase agreement to sell Fleming's wholesale grocery business to C&S.

The sale procedures now provide for other bidders to submit offers by July 28, with an auction to follow on July 31. The final sale hearing will be held Aug. 4 and the closing date for the sale would be expected in mid-August.

WorldCom bonds opened at 30½ bid, 31 offered, where they remained throughout the day, a trader said, similar to levels on Monday.

WorldCom said on Tuesday it won court approval to sell high-speed wireless assets to Nextel Communications Inc. for about $144 million in cash, Reuters reported. The Ashburn, Va.-based telephone company originally paid about $1 billion for the wireless assets at the height of the internet boom in 1999 by acquiring several bankrupt carriers that owned the spectrum.

On Friday WorldCom said it will pay $60 million to settle certain fee disputes with Verizon Communications Inc. The $60 million fee will not be paid unless WorldCom's reorganization plan is confirmed by the courts. Verizon agreed not to oppose the reorganization plan.

Meanwhile, Global Crossing Inc., which has been "bouncing all over" the last few days, was seen slightly lower Tuesday. On Monday the bonds rose, buoyed by reports last week that the Committee on Foreign Investment will extend its review of the company's plan to sell a 61.5 % stake to Singapore Technologies Telemedia for an additional 45 days.

Global Crossing's bonds closed Tuesday's session at 4¾ bid, 5¾ offered, a trader said, a quarter-point lower than Monday.

"Not much of a move, but they've been kind of unpredictable lately," he added.

Following its review, the panel will forward a recommendation to President George W. Bush, who will then have 15 days to decide whether to allow the transaction to move forward. U.S. economic and defense officials have been divided on whether to allow the deal to proceed, Reuters reported.

Last week, U.S. antitrust enforcers cleared Global Crossing's plan to sell a majority stake to Singapore Technologies Telemedia, a company owned by an arm of the Singapore government.

"It was just the usual suspects today, nothing earth-shattering," a trader said of Tuesday's action.

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