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The Altman NYU-Salomon Center defaulted bank and bond indexes continued to diverge last month with the bank loan index rising by 2.51% and the defaulted bond index declining by 2.28%. This follows the pattern of the total returns for last year, according to research by Edward Altman, Max L. Heine Professor of Finance at New York University. The bank loan index in 2002 showed gains of just over 3%, while the bond index declined by almost 6%, Altman indicates.

Credit Suisse First Boston, Bank of America and Dresdner Bank were set for a bank meeting in Europe last Friday for dialysis provider Fresenius Medical Care's $1.5 billion refinancing credit. The U.S. launch is set for tomorrow. One investor pointed to the success of DaVita's $800 million "B" piece in March 2002 and suggested that Fresenius would likely do the same or better. The DaVita deal blew out with more than $1 billion in commitments (LMW, 4/1). DaVita is also a dialysis provider and its debt is quoted at the 100 to 100 1/2 context, according to LoanX.

Barclays Capital wants to beef up its U.S.-based securitization research effort by adding a home equity analyst by the end of the first quarter, according to a firm insider. The analyst would report to London-based William Lloyd, head of securitization research. Lloyd declined to comment.

Keefe, Bruyette & Woods has added Steve DiTursi to its corporate bond trading desk as it looks to grow its fixed-income business, according to Craig Coats, co-head of fixed-income. DiTursi will trade utilities and industrials. He joins from RW Pressprich & Co., where he was the head of corporate bond trading. He declined comment. RW Pressprich's plans to replace DiTursi could not be determined. A call to Ed Rappa, the firm's chairman, was not returned.

Kevin Wilson is v.p. and treasurer of Solutia Inc., an applied chemistry company and high-yield issuer based in St. Louis.

Kmart's bank debt shot up after the company announced that it was close to filing a reorganization plan. The company's three-year credit facility was said to have traded into the 32-33 range, up from the mid-20s, where it has been languishing since before the holiday season. Although net sales for the holiday season decreased 5.7% this year, the bank debt climbed as creditors began to see an end in sight for the bankruptcy process.

Scotia Capital, Salomon Smith Barney and Bank of America have closed the book on Levi Strauss & Co.'s $400 million "B" piece which was oversubscribed by a significant amount, said a banker familiar with the deal. The institutional piece was sold at 991/ 2. He was unable to say by how much the deal was oversubscribed. Pricing did not change on the $800 million debt package. The pricing is still set at LIBOR plus 4% for the term loan and LIBOR plus 31/ 2% on the $400 million revolver. The deal refinances Levi Strauss' B1-rated, $1.05 billion facility with the three banks that was to mature in August of this year. Credit Suisse First Boston, FleetBoston Financial and J.P. Morgan have committed to the revolver. Scotia and B of A officials declined to comment, while a Salomon official could not be reached by press time.

Fabien Pictet & Partners, a London-based hedge fund boutique specializing in emerging markets, is introducing a long/short fund dedicated to emerging market debt. The fund, called GEMs Bond Fund, will start trading next month, says Julian Jacobson, portfolio manager. GEMs is the firm's fourth fund, but the first dedicated to emerging market debt. Fabien Pictet & Partners has $200 million under management.

GMAC-RFC and GMAC Commercial Mortgage are planning large European securitizations this year. GMAC-RFC should be the first to market with a £1 billion residential mortgage-backed securitization. GMAC Commercial is expected to bring out its first European commercial mortgage-backed deal through its conduit program later in the year, say London-based bankers. "In 2002, GMACCM Europe completed in excess of E1 billion in European transactions. Our current pipeline is very strong, and we are very optimistic about 2003. We see securitizations playing an increasingly active role in financing in Europe," says James Dalton, president of GMAC Commercial in Dublin.

Some senior tranches of fixed-rate collateralized debt obligations are trading at significant premiums on the secondary market. Some sell-side analysts say the premiums are caused by the low interest rate environment, and note that the situation is rare because secondary CDO notes rarely trade above par.

The $400 million "B" loan backing the $1.66 billion acquisition of Houghton-Mifflin was a blowout after launching to retail last Tuesday. The tranche, led by Goldman Sachs, CIBC World Markets and Deutsche Bank, was oversubscribed by just under four times. "It's a business that the market was able to understand," a banker said, explaining why the credit did well in syndication. The lead arrangers will cut back allocations to investors rather than increase the size of the tranche, he added. He dismissed reports that the "B" had been reduced to $250 million, with the difference made up through a bond piece. Officials at the lead banks declined comment.

HSBC Bank, a relatively new entrant to the European securitization market, is setting its sights on becoming an important market player. After a slew of hires made last year to fill senior positions on the securitization team, the firm is now looking at garnering a spot on the European securitization league tables, according to Robert Drutman, London-based head of European structured product syndicate and product manager.