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A pair of telecom analysts says that of the three high-grade regional bell operating companies (RBOCs), only Verizon Communications offers slight upside for fixed-income investors. Spreads tightened on 10-year bonds of Verizon, SBC Communications and BellSouth after a Wall Street Journal report indicated that a proposal by the Federal Communications Commission would ease restrictions on the baby bells that require them to share their networks with competitors. However, Matt Bartlett, analyst at Banc of America Securities, expects vigorous litigation from the long distance carriers that will try to block or alter the proposal. He also expresses concerns about the apparent two-year timetable for implementation of the changes.

MetLife Investments has hired Bob Halgren as a telecom analyst covering both high-yield and high-grade credits, according to analysts with knowledge of the situation. Halgren fills a position that had been open since Saba Hekmat went to OppenheimerFunds in November. He could not be reached, and John Wand, head of credit research at MetLife, declined comment. Halgren worked for some 15 years at Prudential Financial both in New Jersey and in London, according to one former colleague.

Morgan Keegan is looking to make about five new hires for a fixed-income sales office the firm has established in New York. Peter Lozier, who joined the firm last summer to build the New York team, says he is looking for people with established account relationships in any and all of the principal fixed-income product areas. He is open to hiring more than five people, but says that fixed-income sales has been such a profitable occupation over the last couple of years that recruitment has not been easy. Morgan Keegan underwrote some $32 billion in U.S. debt last year, placing it 12th among U.S. investment banks in 2002, according to Bloomberg.

Consolidated Container, a plastic container manufacturer, was working to amend its credit facility to push out amortization payments on its term loans for two years as LMW went to press last week. According to buysiders and dealers, the amendment would be passed. "It's just a cash flow situation. In order to meet the covenants and perform, they had to mothball the amortization payments," noted one dealer, adding, "It's a two-year deferral and it's supposed to be a permanent solution." The company needs 51% lender approval by tranche to pass any changes to its amortization schedule and also 51% to pass any covenant changes, noted one buysider.

Spreads have rallied on paper company MeadWestvaco Corp.'s benchmark 6.85% notes of '12, and at least one portfolio manager is looking to reduce exposure. J.P. Weaver, who oversees $1 billion in taxable fixed-income at McGlinn Capital Management in Wyomissing, Pa., sees Mead's bonds as a typical example of a credit that may be overdone in the corporate spread rally that has endured since October.

Qwest Communications International's revolver received a boost from speculation that the Federal Communications Commission is going to repeal its provision that requires regional bell companies to rent their networks to long-distance companies at below-cost rates. A repeal would hurt the efforts of long-distance companies to compete in the local arena, but regional bell operating companies, such as Qwest, would benefit from such a ruling, noted one dealer. Market players said a few small pieces of the company's revolver traded in the 94 1/2 95 range. The paper ticked up from the 93 level on the news.

Bank of America and Bear Stearns are shopping a $255 million credit for Nexstar Broadcasting Group in order to back an undisclosed acquisition. The deal is split between a $175 million "B" term loan and an $80 million revolver, however, the pricing has not yet been determined. The credit is set to launch on Jan. 14. B of A and Bear Stearns officials declined to comment.

Energy names were received with open arms last week as investors returning from vacation jumped all over Calpine Corp. paper andAES Corp.'s refurbished credit facility. Investors have become more comfortable with the collateral packages, noted one buysider, and pieces of AES's revolver, "A" term loan, and "C" tranche changed hands at 91-92, 95 1/2 96 1/2, and 93-94, respectively. Across the board, the credit is one-two points stronger since before the holidays. "AES bank debt has been ticking up primarily because vulture funds are playing the capital spreads," said Jon Kyle Cartwright, a fixed income analyst with Raymond James & Associates.

Michael Levitt, an ex-partner at Hicks, Muse Tate & Furst is reportedly buying up assets for his new investment shop, Stone Tower Capital, a new buyside firm formed to manage assets through CLO vehicles. Levitt is chairman of the New York-based buyside outfit, which initially intends to manage an approximately $600 million loan portfolio, according to market sources. Officials at Stone Tower declined comment on plans for a new CLO, how many people are now working there and when the firm began buying assets. Questions were referred to Levitt, who did not return calls for comment by press time.

Short Squeeze Seen For American Tower

Hartford Investment Management Company has hired Nasri Toutoungi as a senior v.p. and lead portfolio manager of its flagship core and core-plus style bond mutual funds. Toutoungi joins from Blackrock Financial Management. Andy Kohnke, managing director and a spokesman for the firm, says HIMCO has been growing assets and had been recruiting Toutoungi for several months to beef up its portfolio management team. Toutoungi takes over one of the roles that had been filled by Alison Granger, who retired at the end of last year to spend time with her family, Kohnke says. Granger could not be reached, and Toutoungi referred calls to Kohnke.

Investors eager to put money to work piled into the paper of Dex Media East, R.H. Donnelley, and Bell Actimedia last week, sparking more than $100 million in trades in the directories business names. Traders said a comprehensive market mix was trying to buy into these deals, with sellers only looking to trade over par. Both Dex and Donnelly traded north of 101 and Actimedia clocked in as high as 100 3/8.