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US Unwired, a Sprint-affiliated wireless telephone provider that has been trying to renegotiate credit covenants since last fall, could breach the covenants by the end of this month if an agreement on a new package is not reached. Ed Moise, US Unwired's treasurer, said if the company does not breach the covenants by the end of this quarter, it expects it will in the fourth quarter. Blowing a covenant would result in loss of access to a $64 million credit. "We're talking to banks about putting a new covenant package in place," Moise said. "It's been a long process. It's coming slowly." The company's bank debt is currently quoted in the 88-91 range, according to a trader.

The practice of underwriting banks coming out of syndication short on new debt offerings is slowly creeping its way into the loan market. Market players cited Goldman Sachs' second-lien term loan and floating-rate note for Calpine Corp. as the most recent example, and one buysider said more banks were adopting the strategy and coming out of syndication an average $5-10 million short. Coming "out of the box syndicate short" is commonly used in the bond market in an effort to assist liquidity and support the new deal, but is considered an anomaly in the loan market.

United Pan-Europe Communications' (UPC) bank debt has been ticking up toward the 90 context as the company's restructuring process draws to a close. The U.S. loan is quoted by dealers in the 88-90 context, up from the 771/2 791/2 range, where the bank debt stood at the beginning of July, according to LoanX. UPC overcame its final obstacle to emerging from bankruptcy last week when the Dutch Supreme Court rejected an appeal by Intercomm Holdings, a creditor that appealed the court's ratification of UPC's plan of composition. The company received U.S. bankruptcy court confirmation for its plan of reorganization in February.

The market for Venture Holding's bank debt is hovering in the 69-72 range as the company, its bank debt holders and Venture founder Larry Winget hammer out terms for the company's restructuring. No trades could be confirmed. James Butler, Venture Holdings' cfo and general counsel, said the parties have agreed to a preliminary term sheet, but it has not yet been disclosed to the public. While the parties are committed to working out a resolution, there are still some "significant hurdles" that need to be overcome, he added.

Western Refining Company's (WRC) new $125 million amortizing "B" loan is bolstered by a cash sweep, which channels 50% excess cash flow toward debt reduction, and a mandatory additional $10 million debt amortization per year requirement, according to Moody's Investors Service. The credit, which will fund the company's acquisition of Chevron USA's El Paso, Texas refinery and associated hydro-carbon inventory, has been assigned a B2 rating. Through a long-term operating agreement, Chevron has been operating WRC's refinery and its own neighboring refinery as one operation since 1993. WRC is looking to run the combined refineries at higher levels of intensity, producing 95,000 barrels per day rather than the 85,000 barrels per day produced under the Chevron operation, and believes that it could exceed historic cash flow patterns with the plan.

AMSTED Industries has completed its first "B" loan as a part of a new $545 million credit facility. The new loan comprises a $425 million, seven-year "B" piece and a $120 million, five-year revolver. It replaces the company's former $1 billion credit facility that was set to mature next year. AMSTED decided to refinance a year earlier to capitalize on the opportune conditions in the credit markets, said Matthew Hower, treasurer of AMSTED. "They had money and we needed it," Hower commented on using the institutional loan market for the first time.

Kinetic Concepts has completed a comprehensive recapitalization plan that includes a new $580 million credit facility, taking advantage of the refinancing opportunity to replace amortizing debt. "Over the next several years the prior loans were maturing," said Jim Farrell, a managing director at Fremont Partners--an equity sponsor to Kinetic--and a Kinetic director. He explained that these loans were starting to meet their peak amortization period and the company also had other high-yield debt that was coming due over the next couple of years. In addition to the credit facility, the recap includes the issuance of $205 million of series A 73/8% senior subordinated notes and more than $263 million series A convertible preferred stock.

Goldman Sachs has priced the notes for The Carlyle Group's $300 million Carlyle Loan Opportunity Fund I, a CLO that will contain par, stressed and distressed loan assets. A banker said the deal will not close until next month, but the notes have been placed. He added that there was the potential to upsize the CLO, but due to the strength of the underlying markets, there was concern over how strong the portfolio would be if more collateral had to be purchased. Michael Zupon, managing director and head of Carlyle's high-yield group, did not return calls.

Operational snags at some plants and an inability to generate earnings from revenue for automotive-interior producer Collins & Aikman Products Co. (C&A) has led to a downgrade by Moody's Investors Service. Difficulties absorbing launch costs and high raw materials prices as well as market share losses by key customers are central factors in C&A's downgrade to B1 from Ba3. The decision affects approximately $540 million in bank debt that includes a $175 million revolver, a $73.9 million term loan "A" and a $292.4 million "B" loan.

Choice One Communications' bank debt has been crawling up toward the 40 range since the company reported stronger financial results for the second quarter. A $10 million piece of the bank debt traded around the 39 level last week and about $30-40 million is believed to have changed hands in the 36-39 range two weeks ago. Prior to the recent activity, traders said the paper traded in the 32 context about a month ago.

An Asian bank is in the process of auctioning off the equity and management contract of Seaboard CLO 2000 in an effort to rid collateralized loan obligation exposure ahead of FIN 46. The managers of the CLO are now at Orix Capital Markets after Seaboard & Co. became a part of the financial services firm several years ago. But the Seaboard team still manages the $308 million deal led by Credit Suisse First Boston, according to a source. The investor is concerned that the debt will be consolidated on the balance sheet, the source added.

Federal-Mogul Corp.'s bank debt was a touch stronger last week after the company announced that it is considering a $350 million equity investment from Citigroup Venture Capital Equity Partners. The market was quoted about a 1-11/2 points stronger in the 751/2 761/2 range, according to market players. No trades could be confirmed.