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Workout and restructuring bankers, along with a few distressed investors and lawyers, found their inner child last week at Institutional Investors Seminars Turnaround Management & Corporate Restructuring Summit at the W New York. A fair few were caught playing with one of the handouts--magna-doodles from Sherwood Partners--during a session.

Thomas O'Connor, portfolio manager at the Montgomery group of Wells Capital Management, says he is considering shifting 10-15%, or approximately $57-86 million of the firm's $575 million short-term fund, out of mortgage-backed securities into agencies. A trigger for the move would be if the Federal Reserve eases to counter the economic slowdown or if Treasuries rally under a war with Iraq, he says. In those cases, lower interest rates would create a high pick-up in prepayments, leading mortgage products to underperform Treasuries, he says. He declined to define a level at which interest rates would be low enough to trigger such move. Another reason for the rotation is that the firm is overweight in mortgage products and has no allocation to agencies.

Edinburgh-based Standard Life Investments is looking for carry instead of making yield bets on the view that the European bond markets will continue to be volatile over the coming months. Gregor MacIntosh, investment director, responsible for E1 billion in European government debt, says he is certain an economic recovery is coming. However, he says the yield curve will not change shape dramatically until there is some sentiment that there is a floor for interest rates--at which point he may reconfigure the portfolio.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Piedmont Capital Management Associates is looking to add some $15 million to corporate bonds in sectors such as utilities and Baby Bell telecommunications companies. Walter Campbell, portfolio manager of $150 million in taxable fixed income, says the move would be a bid to capture yield in areas of the market that have been beaten up relative to their historical performance and that of U.S. government securities. Piedmont would fund the purchases with cash from callable agencies when they are called. As a trigger for the trade, Campbell is waiting for a sell-off in corporate bonds. If spreads remain more or less unchanged, he will add only $7.5 million in corporates and put the rest back into callable agencies. Campbell says he prefers callable to non-callable agencies because they offer more yield.

Ares Management, the Los Angeles based asset management shop associated with Apollo Advisors, is in the market with a new collateralized loan obligation and is also in the process of raising a distressed debt and growth private equity fund in the region of $750 million to $1 billion. Ares is raising the debt for its fifth CLO, called Ares VII, according to a portfolio manager familiar with the CDO market. The shop has nearly $3 billion in assets under management, including more than $1.2 billion in bank loan assets.

Deutsche Bank,Citibank and Morgan Stanley pitched Moore Corp.'s $850 million acquisition facility to investors last week with a $500 million "B" loan priced at LIBOR plus 23/ 4%. The deal backs Moore's $1.3 billion merger with Wallace Computer Services to form one of the world's largest providers of print management services.

Bank of America shifted the tranche sizes and juiced up pricing and security for its $350 million facility for Central Parking. The seven-year "B" piece is now set at $175 million with a spread of 523 basis points over LIBOR with a 25 basis point upfront fee, according to a banker. The "B" was formerly $150 million and priced at LIBOR plus 31/ 4%. The five-year revolver is now $175 million with an unchanged LIBOR plus 21/ 4% rate. The revolver was previously $200 million. Additionally, the deal is secured by collateral now, rather than stock secured with a springing lien as it was originally. A B of A official declined to comment.

Advent Capital, a New York-based money manager with $1.7 billion mostly in convertible bonds, has hired Les Levi to manage and expand its high-yield asset pool. Levi left J.P. Morgan Securities late last year. He was a managing director focusing on high-yield bonds and loan origination. Prior to that, he ran the firm's high-yield telecom and media research group. Levi says he took the newly created position to work on the buy-side. He reports jointly to Odell Lambroza, a senior portfolio manager, and Tracy Maitland, Advent's ceo and founder. A call to Lambroza was not returned.

Many fixed-income professionals are not convinced that newly annointed nationally recognized statistic rating organization (NRSRO) Dominion Bond Rating Service, which has 41 analysts compared to 800 at Moody's Investors Service and 1000 at Standard & Poor's, will be a factor in the market. Tom Parker, a high-yield portfolio manager at Barclays Global Investors, argues that the ratings agencies have run into trouble in recent years because they judge the creditworthiness of a company according to its market cap. Enron and WorldCom proved that bigger is not better when an economic bubble bursts and you don't have any earnings, he says. "How does Dominion change this? The answer is it doesn't," Parker says. "The agencies still have the same problem. How do you adjust to an environment where size isn't the key variable? Adding five other independent ratings agencies doesn't change that either."

Abbey National will use securitization as part of its effort to dispose of its nearly £40 billion bond portfolio, says an Abbey insider. Some of the bonds will be packaged into collateralized debt obligations, he says. The U.K. bank has announced its intention to exit wholesale banking and concentrate on its retail business. In addition, the bank will look to repackage and dispose of the collateralized debt obligations held on balance sheet, says the insider.