Global Crossing’s debt trades low, fueling bankruptcy speculation

After Global Crossing received a ratings downgrade by Moody’s Investors Service on its nearly $11 billion of debt and preferred stock earlier this week, concern about the company’s liquidity began to circulate.

Syndicated bank loans traded off to around 38 cents on the dollar, down from 45 cents Tuesday and the carrier’s bonds were trading below 10 cents on the dollar. Because the company’s bank debt and bonds have traded so low, industry observers are speculating that the company eventually could file for Chapter 11.

The company has not commented regarding a possible bankruptcy but reportedly is working with the banks to try to reach a resolution.

--Kelly Carroll, Staff Writer