Owens Corning continues to be very volatile, but not because of the asbestos legislation. Over the past two weeks the name has climbed as high as 75 on the news that two bank debt holders, Kensington International Limited and Springfield Associates, filed an appeal with the Third Circuit Court to recuse The Honorable Alfred Wolin. The recusal motion claims that the court appointed two consultants to the case who have a conflict of interest.
The loan has come down slightly since that high of 75, but is still trading in the low 70s. The sentiment is that if Wolin is recused, the asbestos liabilities claims will be assigned a fraction of their current value, and creditors will be able to get more out of the company's reorganization. In an early proposed plan of reorganization, a $16 billion figure was assigned to asbestos claims.
Owens Corning recently filed its fourth amended joint plan of reorganization late last month. The reorganization plans is less of what the bank debt holders and bondholders want, explained a person close to the case. Judge Alfred Wolin was given an oversight role on large asbestos credits, including USG, Federal-Mogul Corp., Owens Corning, Armstrong and W.R. Grace in early 2002. At that time, market players suggested the consolidation would create a more efficient litigation environment (LMW, 1/02).
Bank debt for the fixed-line Irish telecom services provider Valentia Telecommunications has been trading fairly actively over the past month with about $30-50 million trading across all tranches. Traders said the name change hands as high as the 100 7/8 and 101 range, which is as high as names trade in Europe, noted one trader.
The facility is broken into a EUR730 million, seven-year amortizing term loan, a EUR260 million, eight year term loan, a EUR260 million, nine-year term loan and a EUR150 million, seven-year revolver. Deutsche Bank, Allied Irish Bank, The Governor and Company of the Bank of Ireland, Barclays Capital, Goldman Sachs, The Royal Bank of Scotland, Citigroup and Morgan Stanley are among the lenders in the facility. European loan players explained that when the loan came to market it was able to raise more than $400 million in institutional investor commitments.