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Last week, Institutional Investor Seminars held its first Turnaround Management & Corporate Restructuring Summit at the W New York in midtown. Highlights included discussions on the growing size and complexity of bankruptcies and the conflicts that ensue. Managing Editor Pierre Paulden was on hand and compiled the following report.

UBS Warburg is shopping a $130 million deal for defense, aerospace and industrial products provider ILC Industries, backing the leveraged buyout of the company by Behrman Capital. A banker familiar with the deal said that ILC management will keep an equity stake in the company in order to keep "skin in the game" and the same management in place. The company's ceo, Clifford Lane, is rolling over a $40 million interest in the company, while Behrman is investing $70.4 million, an investor noted. The fully underwritten deal includes a $115 million "B" piece priced at LIBOR plus 4% and a $15 million revolver at LIBOR plus 31/ 2%. UBS launched the credit last Wednesday. A UBS official declined to comment.

US LEC has preemptively restructured the amortization payments on its $150 million credit led by General Electric Capital Corp. and Wachovia Bank to avoid an anticipated funding gap. As a super-regional telecom company operating in a capital-intensive market, the company took out the debt to build out its networks. However, unlike many other telecom companies, US LEC was able to negotiate a deal with its banks to give the company room to grow and achieve free cash flow, rather than have to encounter a liquidity crisis situation in the future, explained Michael Robinson, US LEC's cfo.

WestLB last week priced a $1 billion multi-sector collateralized debt obligation called Blue Heron Funding V, says a CDO market participant. The deal closed last Wednesday. The CDO is managed out of New York by the portfolio management unit of WestLB. WestLB is the underwriter for the notes, which are backed by a pool of commercial mortgage-backed securities, residential mortgage-backed securities, asset-backed securities and CDOs. This deal, a hybrid between an asset-backed commercial paper conduit and a CDO, is similar to others in the Blue Heron series that have put options embedded in the structure (BW, 9/30). Tom McCaffery, WestLB's regional head of global financial markets in New York, was travelling and unavailable for comment.

St. Mary Land & Exploration has entered into a new $300 million credit that backs the oil and gas exploration company's acquisition of properties from Flying J Oil & Gas and Big West Oil & Gas. The new three-year revolver is led by Wachovia Securities, while Bank of America led the previous $200 million revolver, said Richard Norris, v.p. of finance and treasurer.

* "I call DIPs extreme finance. I have teenage sons at home so it's the x-games of the banking world."--Norma Corio, managing director in the restructuring group at J.P. Morgan, giving her take on the business.

Pacific Investment Management Co. has hired Joshua Anderson, as a collateralized debt obligation analyst. He moves over from Merrill Lynch, at which his final day was last Friday. He starts this week at Newport Beach-based PIMCO, working within an undisclosed group. He will cover both asset-backed securities and CDOs, playing a mixed role as an analyst and portfolio manager. It could not be determined to whom he will report. Anderson declined to comment. Calls to Mark Porterfield, a spokesman at PIMCO, were not returned.

PNC Bank and National City Bank are wrapping up a $120 million credit for Fairmount Minerals after shutting down syndication earlier than expected last month. The credit proceeds will go toward owner dividend payments, as well as for general working capital, a banker familiar with the situation said. The deal was oversubscribed with about 15 investors signing on, the banker added. The facility includes a $30 million revolver, a $60 million "A" piece and a $30 million "B" loan.

Levels for Aurora Foods bank debt softened after the company released its earnings report and Moody's Investors Service subsequently downgraded the credit. The bank debt has slipped from the 92-93 context to the 91-92 1/2 range as the company clocked in a $483.2 million loss for 2002. No trades could be confirmed. Low cash flow run rate levels, limited liquidity, and leverage levels around eight times concern the rating agency.

Royal Bank of Scotland has hired an asset-backed securities analyst for its financial markets division. Nick Ventham, formerly a manager of ABS credit at Abbey National, joined RBS last month. Ventham, based in London, says he reports to Mark Pryor, head of capital markets credit. At Abbey, Ventham reported to Peter Laurent, senior manager in credit. Ventham will undertake credit analysis on buy-side purchases. He will not be replaced at Abbey National, because--as has been widely publicized--the bank is selling off its fixed-income assets.

A consortium of nine Italian banks is launching a securitization of non-performing loans, the special purpose vehicle of which will be backed by Italian treasury bonds. In the event none of the loans are recovered, the treasury bonds will be sold to pay bondholders. Accordingly, the deal is double-A rated, the same as Italy's sovereign rating. The E413.5 million deal, Mutina, should close next month.