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J.P. Morgan and Bear Stearns last week launched syndication of American Media's add-on $140 million "C" loan to investors with a coupon of LIBOR plus 3%. One investor felt the spread is short of the market's demand. "It's a little tight," he said, pointing to the company's leverage multiples of 6.3 times. Moody's Investors Service rated the add-on Ba3, reflecting several factors including moderate cash flow (see story, page 8). A J.P. Morgan official did not return calls, while a Bear Stearns official declined to comment.

Bank of America is leading a $350 million refinancing deal for Central Parking. The credit, set to launch Wednesday, includes a $175 million "B" loan and a revolver for the same amount. The deal will be stock-secured with a springing lien, whereby the lenders have a right to collateralize the credit with the borrower's assets, said a banker. The credit will refinance a $400 million facility that is also equally split between a $200 million "B" piece and a $200 million revolver.

Nextel Communications was an active mover in the secondary market last week as the company came out with bullish statements for its performance in 2003. Traders said a plethora of paper from all tranches of the company's bank debt was bought by retail investors and traded in the street. Pieces of the "B/C" tranches were said to have changed hands between the 94 7/8 95 3/8 context, up from the 93 level.

Hercules has completed a $325 million refinancing deal that alleviates some of the chemical company's debt load of $1.3 billion. Hercules tapped $125 million of its new $200 million "B" term loan in order to pay off its 61/ 8% senior notes that were scheduled to come due this June, said Stuart Shears, v.p. and treasurer. There were reported rumblings at launch that the credit might hit some bumps because of asbestos-related issues, but the deal was oversubscribed with about 30 institutions signing on at close.

WEEKLY UPDATE

SWS Securities, a financial services firm with fixed income sell-side operations in six U.S. cities, is hoping to hire as many as 10 corporate bond salespeople for its New York office. Rob Nash, the firm's Dallas-based head of fixed-income, says SWS Securities has been looking to increase its fixed-income presence for several months. The effort got an important boost, he says, when the firm persuaded Andrew Conway to join in New York as senior v.p. and head of corporate bond trading. Conway resigned from RBC Capital Markets at the end of last year to take what he says is "a phenomenal opportunity with a growth firm." He had worked at the firm for 25 years as a corporate bond trader. A call to Simon Ling, Conway's former boss at RBC, was not returned.

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.