Nextel's bank paper trades lower after recent run-up, leaving many baffled

By Sara Rosenberg

New York, March 18 - One of the most puzzling occurrences in the secondary bank loan market was the almost one point drop in trading levels of Nextel Communications Corp.'s bank debt to 95 3/8 on the term loan B and C.

Most traders questioned could not identify any particular reason why the paper dropped so significantly, especially since Nextel has been such a strong performing credit recently.

Asked whether it could be a result of profit taking, one trader responded: "That's an awful big jump for profit taking. I have no idea. I think most people are puzzled by it."

On Friday, the Reston, Va. wireless company's B, C term loans were trading in the low-96 area.

Charter Communications Inc.'s bank debt dropped by about half a point on Tuesday on news that Ralph G. Kelly, senior vice president and treasurer, resigned from his position March 14. The St. Louis cable company's term loan B was quoted at 86 bid, 87 offered after a slight rebound by the end of the day, according to traders.

Kelly's resignation was attributed to the pursuit of other career interests, according to a filing with the Securities and Exchange Commission.

Eloise Schmitz, vice president of finance and acquisitions has assumed interim responsibility until a permanent replacement is named.

This is just another management change in what has been a long list of changes at Charter since the announcement of an accounting investigation. Most significantly was the announcement in December that David G. Barford, the executive vice president and chief operating officer, who had been placed on leave, was fired and replaced by Margaret A. Bellville, and Kent D. Kalkwarf, the company's executive vice president and chief financial officer was fired. Steven A. Schumm, Charter's executive vice president and chief administrative officer was named interim chief financial officer at that time.

Meanwhile Tenet Healthcare Corp.'s bank debt was said to be up with a 93 bid, according to a trader, who admitted he had not really seen many bids coming in on Tuesday.

"Obviously, it should be up. They're selling like 14 hospitals. I think it was like 90, 90½ last time I saw it about a month ago. It's not a big trader," the trader added.

Tenet Tuesday announced plans to divest or consolidate 14 hospitals with aggregate annual revenues of approximately $933 million that no longer fit the company's core operating strategy and reduce non-patient care expenses by at least $100 million annually as part of its program to improve operating efficiency and profit margins. Proceeds of the planned divestitures will be used primarily to accelerate the company's planned share repurchases.

"As we move through 2003, Tenet's new management team is focused clearly on a defined set of objectives: resolving the specific challenges we face, operating the company with greater efficiency and assuring the success of our core strategy - to build competitive networks of quality hospitals principally in major markets," said Trevor Fetter, president, in a news release. "Today's actions are important early steps toward achieving these goals."

Tenet is a Santa Barbara, Calif. investor-owned healthcare services company.

SBA Communications Corp.'s bank debt moved up to around the mid-90's from the low 90's on Tuesday on asset sale news, according to a trader. However, the trader added: "Everybody talks about it" but since the company's bank debt is all pro rata it "never trades."

The company is selling towers to AAT Communications Corp. and will use proceeds to reduce debt. The transaction, at ATT's choice, will either involve the sale of 679 towers for a purchase price of $160 million in cash or 801 towers for $203 million in cash.

The transaction is subject to various conditions including an amendment to the existing senior credit facility of SBA Telecommunications Inc. to modify certain financial covenants.

SBA is a Boca Raton, Fla. owner and operator of wireless communications towers in the United States and Puerto Rico.

After market hours on Monday, The Shaw Group Inc. announced that it closed on its new $250 million revolving credit facility due 2006 with an interest rate of Libor plus 200 basis points. Credit Lyonnais and Credit Suisse First Boston were co-lead arrangers and Credit Lyonnais was the bookrunner on the deal.

The company also closed on its private offering of $253 million face amount, 10.75% senior notes due 2010.

Shaw is a Baton Rouge, La. provider of comprehensive services to the power, process and environmental and infrastructure industries.

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