Global Crossing emerges from bankruptcy, bonds unchanged; Levi Strauss still weighted by CFO ouster

By Carlise Newman

Chicago, Dec. 10 - Global Crossing Inc. bonds were little changed on the session Wednesday after two straight sessions of gains as the company emerged from bankruptcy after a nearly two-year restructuring that erased most of its $12.4 billion in debt.

The company is now controlled by Singapore Technologies Telemedia, which invested $250 million in Global Crossing for a 61.5% equity share of the company.

In addition to its original investment, ST Telemedia also agreed to purchase $200 million in senior secured notes that were to be distributed to Global Crossing creditors. The cash injection was used to pay off Global Crossing creditors, the company said.

The remaining 38.5% of the company's equity was distributed to Global Crossing's former secured and unsecured creditors.

Global Crossing's 9 5/8% notes were seen at unchanged at 10 bid, according to a trader.

"It's still a solid level for them," he added.

Also, on Monday, Global Crossing said it posted a loss of about $25 billion for 2000 through 2002 as the telecommunications market weakened and it wrote down the value of its high-speed network.

Global Crossing also said it would not generate enough money to meet all of its near-term expenses. It said it may need up to $100 million in financing to fund its operations through the end of 2004.

Meanwhile Levi Strauss & Co.'s bonds continued to erode. Its 11 5/8% notes due 2008 were down about 1 point at 66 bid, 67 offered, while its 7% notes due 2006 notes were unchanged at 65 bid, 66 offered. The 12¼% notes due 2012 notes were down ½ point at 65.5 bid, 66.5 offered.

The apparel maker replaced its chief financial officer, Bill Chiasson, with an outside turnaround specialist late last week and its debt has been sliding since then.

Elsewhere, Aurora Foods Inc.'s 9 7/8% notes due 2007 were unchanged at 78 bid, according to a trader. The bonds were trading at 72 bid a few weeks ago.

Aurora filed for Chapter 11 bankruptcy protection Monday to implement its financial restructuring and head toward completion of its pending merger with Pinnacle Foods. Under the plan, lenders will be paid in full.

"There's a good possibility that they come out of this a stronger company. That's obviously always the goal with a restructuring. But there is a confidence in this company that you don't see with every case," a trader said.

In other news, Owens Corning's 7½% notes due 2005 were still unchanged at 42½ bid, 43½ offered. The bonds had been trading at nearly the same levels since early November, when the company reported third-quarter earnings.

The Toledo-based flooring and building materials manufacturer reported income from operations of $104 million for the quarter, including $5 million of Chapter 11-related charges and a $1 million other charge as the result of a contractual post-closing adjustment to the selling price of the Company's metal systems business.

In other news, Revlon Inc.'s 8 5/8% notes due 2008 were up 1 point at 49 bid, traders said. The bonds have been quietly creeping up for several days. A few weeks ago, they were "all over the place," one trader said.

The cosmetics maker's paper was about 6 points higher several weeks ago after financier Ronald Perelman's MacAndrews & Forbes Holdings Inc. has agreed to provide it with up to $125 million of new loans to continue operating.

From the end of 2002 until the end of the third quarter, Revlon's long-term debt grew to $1.86 billion from $1.75 billion.

"Revlon has been on the radar pretty much every day for weeks now," one trader commented.

Loral Space & Communications Inc.'s 10% notes due 2006 were up ½ a point at 75½ bid. That issue has been higher after weeks at levels in the low 70s after the company reported that its third-quarter loss nearly tripled.

The New York-based company said its loss rose to $128 million, or $2.90 per share, from $57 million, or $1.53 per share, a year earlier. Revenue fell 78 percent to $47 million.

Loral and various units filed for protection from creditors on July 15, after being hurt by too much debt and industry overcapacity.

The company obtained court approval in October for the sale of its North American telecommunications satellites to Intelsat Ltd. for up to $1.1 billion.

West Point, Ga. home fashions company Westpoint Stevens Inc.'s 7 7/8% notes due 2008 were up ½ point at 15 bid. The notes had been trading around 13 bid for the last several weeks.

Construction company Schuff International Inc.'s 10½% notes due 2008 were seen at 58 bid, down from recent levels in the mid-60s.

Lastly, WorldCom Inc.'s 7½% notes due 2011 were quoted at 35 bid, unchanged.

(Paul Deckelman contributed to this report)

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