Search results for

Senior loan funds, hobbled by heavy net redemptions and relegated to the sidelines over the last 18 months, may be primed for a more active role in the loan investment markets. A more favorable environment is seen to be taking shape and should translate into more participation by the floating rate funds, market players said.

Mimi Eng, a v.p. in the structured product group at J.P. Morgan Securities, was recently laid off, says a collateralized debt obligation official at the firm. She was a CDO structurer, reporting to Romita Shetty, managing director and head of the global CDO business for the firm. Eng could not be reached for comment. Shetty did not return calls seeking comment on whether Eng's spot will be filled.

Issuance of sterling-denominated inflation-linked bonds will at least double in 2003, say London-based bankers, analysts and investors. Inflation-linked bonds have been relatively uncommon in the sterling market, but pent-up demand from pension funds and institutional investors is fueling increased interest from corporate and government issuers in the asset class, says Mark Capleton, bond strategist at Barclays Capital in London. As of last week, there had been roughly £1.5 billion in inflation-linked bonds issued this year and Capleton expects to see £3 billion plus next year--a conservative estimate. Barclays Capital is aggressively marketing inflation-linked bonds to its clients.

Two market value collateralized debt obligations managed by TCW are to be liquidated after the manager failed to stay in compliance with minimum net worth and overcollateralization tests, triggering an event of default. TCW Leveraged Income Trust (LINC) and TCW Leveraged Income Trust II (LINC II), which consist of high-yield bonds, leveraged loans and mezzanine debt, have been suffering from underperforming markets for several years, according to a buysider. He added though, the period between July and October this year was the nail in the coffin.

A sell-side analyst continues to see opportunities for total return investors in high-yield consumer products, but a portfolio manager sees the sector as fairly valued. George Chalhoub, analyst at Deutsche Bank and the top-rated consumer products guru on the 2002 Institutional Investor All-America Fixed-Income Team, is maintaining his buy on the sector in spite of recent sizeable gains. Among his top recommendations are Salton Inc, maker of Farberware, the George Foreman grill, and the Scooby Doo shower radio, among other products, and Samsonite. Salton's 10.75% notes of '05 (B2/B) were bid at 97.5 last Tuesday, up from 89 roughly a month ago. Chalhoub says the bonds should trade at 102 or 103. Samsonite's 10.75% notes of '08 (Caa2/CCC) were up to 82 from a 73 bid over the same period. Chalhoub sees the high 80s as fair value for the bonds. "The consumer has not retrenched as much as people thought, and from a credit specific standpoint these companies came into the second half much better prepared for low demand than people gave them credit for--both from a cost standpoint and in terms of inventory management," he says.

Blackstone Debt Advisors has priced the notes on its debut collateralized loan obligation, a $600 million vehicle called Hanover Square. More than half the collateral has been warehoused, and Blackstone is set to ramp up the remaining assets in a market primed for investors. The deal has been in the pipeline for most of the year, but the division of The Blackstone Group hit the market now due to the increasing spreads on deals. "We had a warehouse facility, but were not aggressive in our buying strategy until August. When spreads to high quality issuers became more attractive, we bought assets," explained Dean Criares, managing director and portfolio manager.

Bank of America will hold a bank meeting tomorrow for Vanguard Health Systems, launching syndication of a $150 million, add-on term loan "B" to back the company's $295 million acquisition of five hospitals from Baptist Health System, said a banker. Pricing for the add-on had not been determined at press time. The company's existing $125 million revolver, led by B of A and co-documentation agents Wachovia Securities and General Electric Capital Corp., is priced at LIBOR plus 3%. A B of A banker declined to comment.

Hillenbrand Industries, which caters to the funeral and health care service industries, needs more covenant leeway for its credit facility after a jury ruled against the company and its Hil-Rom business unit in a lawsuit filed by Kinetic Concepts. Hillenbrand has appealed the $173.6 million decision-- which finds the health care unit culpable of violating various antitrust laws-- but also amended its $500 million credit in the event that the litigation results in a payout. "We amended the facility in case of a material decree," said Mark Lanning, v.p. and treasurer. The amended line provides an alleviated debt-to-capital ratio requirement if Hillenbrand loses the lawsuit, he explained. The court is expected to issue a ruling sometime after this Wednesday.

Commercial mortgages took centre stage in Australia this week, as two CMBS transactions came to market and Deutsche Industrial resurrected its postponed CMBS issue. Over A$3bn of CMBS will have been issued by the end of the year. On Monday ANZ Bank and Commonwealth Bank of Australia priced a A$200m transaction for properties group Centro. The five year bullet notes are backed by one regional and six sub-regional shopping centres.

Australia The Bank of Queensland (BoQ) launched a A$125m December 2005 transaction yesterday (Thursday) to be priced today. The three year deal was marketed with pricing guidance of 44bp-46bp over swaps, with UBS Warburg and Westpac Institutional Bank acting as joint lead managers. "The markets are quiet right now, so BoQ almost has the market to itself," said one banker.

Australia The Australian government has deferred the next sale of Telstra stock, the T3 issue. It would have been worth more than A$30bn at recent Telstra trading levels, or close to $20bn.

ABN Amro Rothschild and UBS Warburg completed the bookbuild for the MobileOne IPO this week in tricky and price sensitive markets. After a brief retail offer that ends early next week, Singapore's second largest mobile phone company will list on December 4.