Apollo Global Management LLC (APO:US)’s Momentive Performance Materials Inc.’s subordinated bonds fell to the lowest level since 2009 as creditors organize for a potential restructuring.
The chemical maker’s $381.9 million of 11.5 percent subordinated notes due in December 2016 fell 16 cents on the dollar at 2:28 p.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. That’s the lowest intraday price since July 2009.
Holders of that debt hired Blackstone Group LP and Stroock & Stroock & Lavan LLP as advisers, according to two people with knowledge of the discussions, who asked not to be identified because the conversations are private. The Albany, New York-based company, which has about $3.3 billion of debt, doesn’t face a maturity until 2016, giving its sponsor time to coax investors into accepting a relief package that may include a debt exchange or extension.
John Kompa, a spokesman for the company, didn’t immediately return an e-mailed message seeking comment.
Holders of Momentive’s $635 million of 9 percent, second-lien bonds due January 2021 retained Houlihan Lokey and Milbank, Tweed, Hadley & McCloy LLP, one of the people said last week. Those notes fell 0.5 cent to 89.5 cents to yield 11.2 percent, Trace data show. That’s down from 96.9 cents on May 21.
Standard & Poor’s cut the manufacturer of specialty chemicals one grade to CCC- on Feb. 11, citing “dim” prospects of avoiding a default or debt restructuring this year. Available cash will probably be constrained under its debt maintenance requirements, credit analysts Cynthia Werneth and Paul Kurias wrote in the note.
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