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Deerfield Capital Management is prepping a structured finance collateralized debt obligation that has money market tranches with a put option embedded in it, says a CDO official. Pricing for the $300 million deal, called NorthLake CDO, is scheduled for the end of the month. Morgan Stanley is underwriting the notes. The collateral is a mix of asset-backed securities, mortgage-backed securities and CDOs. Calls to Jon Strain, head of distribution at Morgan Stanley, were not returned. Scott Roberts, president at Deerfield, declined to comment.

The structure of Del Monte's new acquisition debt package led by Bank of America and J.P. Morgan was completely overhauled the week before it closed due to a red hot bond market, explained Thomas Gibbons, Del Monte senior v.p. and treasurer. The financing, which backs the acquisition of businesses from H.J. Heinz, had originally included a $900 million credit facility, $300 million in floating-rate notes, and a $300 million bond issue. Ultimately, the bond deal was upsized to $450 million. The bank deal was downsized so that a six-year, $600 million pro-rata piece was reduced to $495 million, and the $300 million floating-rate notes were rolled into the $500 million "B" term loan, which was then cut back to an eight-year, $750 million "B" tranche.

Fears that an overheated U.K. housing market could negatively affect securitizations of buy-to-let mortgages are completely overdone, say analysts and issuers. Last year, there was concern that Paragon Mortgages had pulled its £400 million because of negative sentiment toward the buy-to-let market, but Nick Keane, the firm's finance director, says the deal was postponed because residential mortgage-backed securities' spreads were too wide. He declined to say at what levels Paragon would seek to bring the deal.

M&G Investment Management is aiming to bring to market its first collateralized debt obligation of asset-backed securities later this quarter or early next. Dagmar Kent-Kershaw, London-based head of CDOs, says M&G is doing a CDO of ABS, because the firm has always been active in the asset class and it offers good arbitrage opportunities. The E400 million deal will be called Pallas.

Northern Rock, one of the U.K.'s most-prolific issuers of residential mortgage-backed securities, is planning to extend its U.S. investor base with its first deal of the year. The deal will feature a $2.2 billion series tranched into pieces to appeal to money market and Fed funds investors as well as structured investment vehicles, says Chris Storey, Newcastle-based securitization manager. Northern Rock brought two jumbo RMBS deals last year.

Wachovia Bank's originally planned $355 million credit for Pilot Travel Centers has been reduced to a $250 million revolver, with a proposed bridge loan eliminated. The $105 million, one-year bridge loan was intended to back Pilot Travel's $190 million acquisition of Williams TravelCenters, explained Jeffrey Cornish, v.p. of finance and cfo. However, the company axed the bridge loan after delaying the close date for the transaction. The acquisition was originally scheduled to close by the end of 2002. The delay allowed Pilot more time to complete an $85 million private placement deal led by J.P. Morgan, he said. He noted that there had been commitments on the proposed bridge.

Alliance Capital has hired Dina Sbare to the position of v.p. in the high-yield research group. An analyst with knowledge of the situation says Sbare was hired to fill a position that had been vacant, though the name of her predecessor and the reason for the vacancy could not be determined. Sbare declined comment when reached at Alliance, as did Kate Kutasi, head of U.S. high-yield, distressed and private securities research at the firm.

American Media (AMI) dominates the tabloid business and its supremacy in this niche area of the media market is built on a debt-financed acquisitive growth strategy. AMI is acquiring Weider Publications for $350 million and Moody's Investors Service expects the publisher to continue to pursue debt-financed acquisitions.

American Tower Corp.'s bank debt received a lift from the news that the company would use $30 million in proceeds from the sale of its Verestar subsidiary to pay down its credit facility. Market players said a $2-3 million piece traded in the 92 3/4-93 context. The bank debt has rallied from the mid-to-high 80s over the last month. Questions for Bradley Singer, cfo, were referred to a spokeswoman who did not return calls.

Evergreen International Aviation is looking for new lenders, including institutional players, to complete a facility designed to refinance roughly $275 million in bank debt coming due in May. Mike Barr, Evergreen cfo, said the company is in negotiations with a number of banks and institutional lenders but is running up against the stigma currently attached to the airline industry. "We are in a situation where we are actually performing very well in an industry that has been hard hit," he said. "Our biggest problem is trying to convince people that we are not United Airlines."

David L. Babson & Company is said to be coming to market with a new collateralized loan obligation, the first one since completing the acquisition of Wachovia's institutional leveraged loan asset management business, First Union Institutional Debt Management (IDM). Drew Dickey, managing director at Babson, could not confirm or deny Babson is doing a deal as "any CLO would be a private placement." But, he added, "Certainly, it is fair to say the acquisition of IDM enhanced Babson's ability to complete deals when it is prudent."

Bear Stearns and Merrill Lynch will be launching this week retail syndication of the $800 million deal for Penn National Gaming as regulatory approval is set to clear in February for the gaming company's $780 million acquisition of Hollywood Casino Corp. The credit launched at the senior level in October, with Société Générale and Credit Lyonnais signing on at the agent level, said a banker familiar with the deal. Wells Fargo and Wachovia Bank have also signed on.