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Nextel Communications has made progress in deleveraging its balance sheet and is anticipated to further improve its capital structure using free cash flow and opportunistic debt and equity issuance to refinance higher interest borrowings. Fitch Ratings has raised its credit rating for Nextel's senior unsecured notes to BB- from B+ and its senior secured bank facility to BB+ from BB. Fitch has also assigned a BB- rating to a $1 billion senior redeemable twelve-year note offering. The outlook is positive.

Pro rata investors were looking at VITAS Healthcare Corp.'s $35 million second-lien term loan in addition to the first-lien $25 million revolver and $60 million term loan, a banker close to the deal said. He did not cite specific pro-rata lenders, but added that standard second-lien investors were also eyeing the LIBOR plus 10% priced tranche.

Rural Cellular Corp. ticked up to the 98100 range after the company announced that it would use the proceeds from a $325 million note issue and cash on hand to reduce its credit facility by $356.1 million. Two weeks ago the company's term loan "B" was quoted in the 951/2 961/2 context, according to LoanX. No trades could be confirmed. Market players had predicted that Rural Cellular would issue new notes ever since Centennial Communications Corp. tapped the high-yield market last month (LMW, 6/16). Rural Cellular's notes were completed last week and carry a coupon of 97/8%.

Large pieces of HealthSouth's bank debt traded in the low 80s last week down from the high 80s. Dealers said one seller's $40-50 million of exposure traded in chunks between the 80-82 context. The seller is believed to have been an original lender that was unable to auction the paper when coming to the market at an earlier time. "He just wanted out," said one trader, regarding the seller's motive. One of the pieces sold by this lender was a $25 million piece, which traded in the 82 context. A $10-15 million slice of HealthSouth bank debt also traded last week in the 821/2 range, according to a dealer, but whether the paper came out of the same seller could not be determined.

Massey Energy has completed a new $355 million credit facility led by Citigroup, PNC Bank and UBS. The Richmond, Va.-based coal-mining company's prior $400 million revolver was set to expire in November 2003 and was led by Citi and PNC, said Baxter Phillips, Massey's v.p. and treasurer. "The [new] facility was completed to renew maturing facilities, for increased liquidity, an additional letter of credit capacity and to leave Massey with cash on its balance sheet," Phillips explained.

UBS and CIBC World Markets are leading a $231 million bank facility backing The Cypress Group's $433 million acquisition of J.W. Childs-owned The Meow Mix Company. The new bank loan will comprise a $30 million revolver, a $176 million term loan and a $25 million second-lien term loan, said a banker, who added that syndication will launch July 30. A bank credit was repotedly chosen rather than a high-yield deal because the company has only one year of audited financials.

UBS launched syndication last week of a $175 million asset-based revolver for Broder Bros. backing the sportswear distributor's acquisition of Alpha Shirt Company for $360 million. A banker familiar with the deal said CIT Commercial Services came into the deal ahead of the bank meeting as a collateral agent, while Bank One joined as a syndication agent. Pricing on the revolver is LIBOR plus 21/2% with a 50 basis point undrawn fee, he added. About $80 million of the revolver is expected to be drawn upon closing, he also noted. There is a senior notes deal emerging in relation to the transaction. The bond deal should come out either this week or the next, the banker said.

A slew of big-name managers are seeking to raise debt for collateralized loan obligations, not letting tightening spreads on loans deter them from taking advantage of an improving credit environment and low-cost financing for the liabilities. The Blackstone Group, INVESCO and Sankaty Advisors have all entered the pipeline in the last few weeks, joining a list of blue-chip names raising debt that includes The Carlyle Group, Octagon Credit Investors and Eaton Vance, according to analysts and investors.

INVESCO and Blackstone Debt Advisors are both raising debt for new collateralized loan obligations. A loan manager said the INVESCO vehicle is called Sagamore CLO and is being underwritten by J.P. Morgan. INVESCO, which has over $5 billion in loan assets under management, last completed a CLO in the fall with Saratoga CLO 1 (LMW, 9/1). The loan team is led by Anthony Clemente, managing director and head of the high-yield investments group, who declined comment. Pricing on the notes and the amount of collateral required could not be ascertained. Officials within J.P. Morgan's CDO group did not return calls.

ABN Amro and UBS' $275 million refinancing deal for EaglePicher was headed toward full subscription late last week. The $125 million revolver was fully subscribed ahead of the bank meeting on July 17, while tickets for the $150 million "B" loan rolled in throughout the week, bankers said. The "B" piece is priced at LIBOR plus 4% and the revolver has a spread of 31/2% over LIBOR. UBS is also leading a concurrent $220 million bond deal, the bankers noted, adding that the road show kicked off last Wednesday. The bond deal will go toward a cash tender offer for the Phoenix-based company's 93/8% senior subordinated notes due 2008.

Refinancing and repricing deals have caught on like wildfire as companies are seizing issuer-friendly opportunities to capture better pricing on their credits while they still have the chance. Last week, DirecTV and National Waterworks tapped investors for tighter pricing on credits that were completed less than nine months ago. DirecTV's $1.675 billion deal was originally completed last March, while National Waterworks was done last November. DirecTV is seeking to tighten its "B" loan, while National Waterworks seeks to ease some of the concessions that lead banks J.P. Morgan, Goldman Sachs and UBS had to ante up in order to get the deal done late last year (LMW, 11/18).

Jacuzzi Brands has recently completed a $200 million asset-based revolver, a $65 million second-lien term loan and has issued $380 million in new notes, allowing the company to achieve interest rate savings and extend out maturities, said Diana Burton, v.p. of investor relations. The interest rate on the West Palm Beach, Fla.-based company's $403.2 million in bank facilities was set to accelerate in July, with the 63/4% over LIBOR spread targeted to increase by 1/2% each quarter until the October 2004 maturity date.