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Market players expect allocations for Crown Cork & Seal's new credit to come out soon and are anticipating the company's $500 million "B" term loan to trade above par. The paper is priced at LIBOR plus 41/4%. The company is currently pursuing a refinancing plan that also includes a $550 million revolver. One trader explained that the paper was likely to trade up because the company had trimmed down its bank debt, so the supply of paper relative to demand is less.

El Paso Corp. continued to be a focus of secondary market players last week as investors and spectators speculated on how the company would deal with the upcoming maturities on its $3 billion, 364-day revolver coming due in May and its $1 billion credit expiring in August. El Paso spooked investors last week when it drew down fully on the August line (LMW, 2/17). The May line is only half drawn and can be termed out for one year. Some market players think that the company will choose to give the bank holders under the May facility extra security in exchange for the extension of that line. Under this scenario, El Paso is expected to draw down on the May credit to repay the August line.

Moody's Investors Service has placed Interstate Bakeries Corp. on review for a possible downgrade following the company's announcement that earnings for its 2003 fiscal year ending May 31 are likely to be lower than previous guidance. The company's $300 million revolver, $375 million term loan "A" and $125 million tranche "B" are currently rated Ba1. The rating agency does not rate the company's $100 million "C" piece maturing in 2007. Paul Yarick, Interstate Bakeries treasurer, said the company is undertaking efforts to address the issues from both a long-term and short-term standpoint.

Owens-Illinois is bringing a $1.5 billion refinancing deal to the market and senior managing agent-level lenders are looking at the credit. A banker familiar with the situation could not confirm structural details at this point. However, a company conference call stated that the facility would include a revolver and "B" piece in the amount that the market would accept. The call noted that the glass container company would do whatever else it needed to refinance the $2.45 billion debt load, for example an additional high-yield offering in dollars or Euros. The refinancing plans are targeted to be complete by the first half of this year. Owens-Illinois refinanced $1.6 billion of its debt in 2002, primarily through bonds.

Newcastle Investment Corp., a New York-based subsidiary of hedge fund Fortress Investment Group, is readying a real estate collateralized debt obligation. The $500 million deal, called New Castle CDO II, is jointly led by Bear Stearns and Morgan Stanley. Pricing is set for next week, according to a CDO market participant. Calls to Bear Stearns and Morgan Stanley's CDO trading desks were not returned. Michael Wirth, cfo and treasurer at Newcastle, did not return calls.

Coast Asset Management is prepping Coast Senior Debt Opportunities, a $500 million collateralized debt obligation backed by CDOs, says a CDO market participant. The Santa Monica, Calif.-based asset manager has three CDOs of CDOs outstanding. It has originated one deal every year since 2000. The new deal, underwritten by CIBC World Markets, is expected to price in the second quarter. Calls to Ken Wormser, managing director and head of asset securitization at CIBC, and to Jason Golush, director of CDO investments at Coast Asset Management, were not returned.

CenterPoint Energy is looking for an extension on its $3.85 billion loan facility, maturing this fall, and also wants to delay and reduce two $600 million payments due this year that are required under the current deal, according to sister publication Power, Finance & Risk. With the first $600 million due at the end of this week, the Houston player will likely be right up against deadline, say lenders poring over the paperwork. "It'll be tough to make the deadline," said one banker. Leticia Lowe, a spokeswoman for CenterPoint, said the company is not commenting on the talks with banks.

Bank of America is reworking its $350 million credit for Central Parking because bad news and executive changes at the company have banks calling for a pricing increase and changes in the deal's collateral package. Hiram Cox, cfo of the company, resigned Feb. 14, the same day the company announced an invoicing error that reduced fiscal first-quarter earnings and prompted a stock price decline. The company has said Cox's resignation and the invoicing problem are not related. Lenders are concerned because their deal is secured by the company's stock. A bank meeting was set for Friday afternoon, after LMW went to press, to address possible changes that include a switch to a direct collateral deal and a price hike.

Citibank last week priced the notes for OppenheimerFunds subsidiary HarbourView Asset Management Corp.'s latest collateralized loan obligation, a deal that stands out from the crowd because of the ability of the manager to buy a bucket of deeply discounted assets and the inclusion of reallocation and triple-C haircut tests. The $300 million deal, called Harborview CLO V, allows the manager to invest up to 2.5% of the deal in defaulting assets and 5% in triple-C assets, said Sean Dougherty, an analyst with Standard & Poor's, who added, "The manager believes there is a real value play there." Officials at HarborView and Citibank declined comment, citing the private placement nature of the transaction.

WEEKLY UPDATE

Charles Kinzer, a top Credit Suisse First Boston mortgage-backed securities salesman, and one of the high-profile "group of 40" who almost left for Barclays Capital in 2001, has taken a leave of absence from the firm, said residential MBS group chief Matt Ruppell. Calls to Kinzer's Manhattan residence were not returned. Ruppell says that a decision on replacing him "is a difficult one since he was such a big part of things here. We're trying to come up with a solution as we talk." He acknowledged that Kinzer covered Freddie Mac for the firm, an account that many firm veterans peg as likely the firm's largest MBS revenue producer. Ruppell says the Freddie account had not been reassigned as of last Thursday.

Underwriter Deutsche Bank has priced the notes for Oak Hill Advisors' approximately $500 million collateralized loan obligation called Oak Hill Credit Partners II. The cash-flow deal will be approximately 85% loans with a 15% bond bucket, according to one portfolio manager. The amount of collateral already bought for the deal could not be determined. Officials at Oak Hill declined comment, referring questions to Deutsche Bank. The banker responsible for the deal did not return calls.