Market: Even Telecom Phoned it in Last Week in Secondary Trading
February 28, 2000
The secondary high yield market was even quieter last week than in the previous couple of months, and it has not exactly been a hotbed of activity lately. The market was closed on Monday in observation of President's Day and the days afterwards just didn't generate much interest, traders said.
For the most part, even the hot telecom sector didn't generate much scuttlebutt in the market. The one exception, however, was Level 3 Communications which traded up to 101.5 in secondary trading after pricing a mammoth deal at par late in Thursday's session. The deal was $2.2 billion, increased from $1.4 billion and, by all accounts, was well-received. The offering captured practically all the attention last week from portfolio managers.
Revlon Inc. was a little stronger in its 8.125% issue and its 9% issue, traders said, after the company announced it would sell its professional products business to the unit's Chairman Carlos Colomer for as much as $325 million.
The company plans to use the proceeds to pay down its debt and is said to be in further discussions to sell some of its Latin American brands as well. Revlon also has an 8.625% issue as well as the much-publicized zero coupon notes that went on a roller coaster ride last year.
Revlon also reported last week a larger-than-expected fourth quarter loss from operations of $128.6 million, compared with a net income of $6.5 million for the year-ago period.
Chiquita Brands rebounded to trade at 85 last week; at the beginning of the month those notes were at about 78, a trader said. Chiquita announced earlier in the month its fourth quarter loss of $75 million.
Paracelsus Healthcare Corp. got hammered two weeks ago in the secondary watching its bonds fall to the low 30s from about 61. But last week, the bonds rebounded to about 47, traders said.
Paracelsus, which owns and operates hospitals and nursing homes was punished by investors two weeks ago after it announced that it would not make its $16.25 million coupon payment on a $325 million issue.