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Charter Communications rallied a couple of points despite the announcement that an additional $1.4 billion of franchise costs and $1.2 billion in deferred income tax liability should have been recorded. Market players said the bank debt traded up to the 83-84 range from the 81-82 context because the news removed some of the uncertainty that has surrounded investigations into Charter's accounts. In addition, market players said the news had a net zero effect on the company's cash position. "It doesn't have any impact on cash flow," noted Eric Geil, Standard & Poor's analyst. David Andersen, Charter spokesman, explained that the franchise costs were actually on the asset side of the company's balance sheet versus the tax liabilities, which counted as liabilities. "They cancel each other out," he said.

Deutsche Bank this week launched syndication of a $240 million credit for Grant Prideco, backing the $350 million acquisition of Reed-Hycalog from oil field service-company, Schlumberger. The line will consist of a four-year, $50 million "A" term loan priced at LIBOR plus 2 3/4% and a $190 million revolver with a LIBOR plus 2 1/2% spread, explained a banker. There is a 1/2% fee for $25 million commitments and a 35 basis point fee for $15 million commitments. The company also intends to raise $175 million through a private placement of senior unsecured notes due 2009. If the bond offering does not pan out, there is a committed provision for a supplemental bridge loan, the banker said. The credit is fully underwritten and is an asset-based deal, he added. A Deutsche Bank spokesman declined to comment.

R.H. Donnelley's $850 million "B" piece has been oversubscribed and is set to close this week, said a banker familiar with the credit. The remainder of the $1.55 billion loan package is expected to close early next week with the final terms set to be completed after the holiday, he added. Lead banks Deutsche Bank, Bear Stearns, and Salomon Smith Barney priced the "B" tranche at LIBOR plus 4%, while the spread on the $125 million revolver and $575 million "A" loan is LIBOR plus 3 1/2%. The deal also includes pre-payment penalties. Bankers on the deal either declined to comment or did not return calls.

Nextel Communications received positive attention from secondary market players last week ticking up to highs the paper has not seen for almost a year. Quarter after quarter Nextel has outperformed expectations, said one trader, adding that speculation of further consolidation in the wireless sector also has people paying more attention to the paper. Traders said the "B/C" tranche traded three times in the Street at 92 last Wednesday and then up to 93 1/2 on Thursday. Nextel's term loan "A" and "D" also were able to reap some of the attention with trades in the 90-91 context and 88 3/4-89 1/4 ranges, respectively. "People are shorting the bonds and buying the bank debt," noted one trader. Calls to a Nextel spokeswoman were not returned by press time.

Deutsche Bank and Credit Suisse First Boston closed out Rexnord Corp.'s $435 million credit line Monday with more than 50% oversubscription on the seven-year, $360 million "B" piece, according to a banker familiar with the deal. The "B" loan was trading over par the following day, he added. Pricing stayed at debut levels, with a LIBOR plus 4% spread on the "B" tranche, and LIBOR plus 3 1/2% on the six-year, $75 million revolver. In addition to what one buysider described as favorable pricing, the term loan also included amortization as a credit enhancement. A Deutsche Bank official declined to comment, while a CSFB banker did not return calls.

WorldCom's bank debt clamored upwards alongside of bond prices on reports that Rudy Giuliani has joined on with David Matlin of Matlin Patterson Asset Management to raise $1 billion to purchase WorldCom bonds. Several small pieces of WorldCom's bank debt traded in the 24-25 context last week as traditional distressed players looked to buy into the paper. The paper traded last week in the 22 1/2 - 23 1/2 range. The names of the players could not be determined. Calls to WorldCom and David Matlin were not returned by press time. Attorneys at Weil, Gotshal & Manges, the firm representing WorldCom, also could not be reached.

Tyco International's $2 billion, five-year revolver with February '06 maturity traded in the 90 context early this week. Its bank debt, which matures in February '03, was quoted in the 97-97 3/4 context and traders said the paper has been creeping closer to par as its expiration date approaches. The February '03 bank debt was a $3.855 billion, 364-day revolver that was termed out in February this year.

The phenomenal growth of the CDO market has lead to new structures, with investors moving away from the initial black box CDOs toward transparent ones, initially static and most recently dynamic, with substitution or a manager. This article addresses some of the more recent developments in the sector and the analytical challenges they present. Although we are aware there are a lot more issues that need to be reviewed by investors in every individual situation, space restraints have meant we have focused on the most important areas.

Nicolas Kello, managing director and head of investor coverage at JPMorgan in New York, has left the firm, marking one of the most high profile departures of recent weeks. Reasons for the move could not be determined by press time and Kello could not be contacted. Adam Castellini, spokesman in New York, confirmed the departure, declining further comment.

Monty Agarwal, Asian head of interest rate derivatives trading at BNP Paribas in Singapore, has resigned. Reasons for his departure could not be determined by press time but officials at the firm said T.S. Cheah, managing director and Asian head of derivatives and structured products in Hong Kong, has assumed responsibilities for the desk. Cheah did not return messages. Agarwal reported to Frédéric Janbon, senior managing director and global head of interest rates in London. Janbon declined all comment.

Bear Stearns has hired Shinichi Kaneko, equity derivatives marketer at Mizuho Securities in Tokyo, in a new role as an equity derivatives product specialist in Tokyo. Bear Stearns has been building up its Tokyo equity desk under Kin Sang Cheung, senior managing director and head of equity derivatives trading in Tokyo, who joined earlier this summer from Lehman Brothers to lead the effort (DW, 7/7). "I have a mandate to build up this business," said Cheung. He declined to comment on additional hiring plans. Kaneko was traveling and could not be reached.

Investment banks in Europe, including JPMorgan, Barclays Capital, Royal Bank of Scotland and ABN AMRO are intensifying their efforts to convince corporates that time is running out to prepare for a new accounting standard that will require them to mark derivatives positions to market. Although the International Accounting Standard 39 doesn't go into effect until 2005, bankers say compliance will require time-consuming wholesale changes in accounting procedures that will have to be in place by the end of next year. "A lot of these companies are just waking up," said Scott Wacker, global head of corporate distribution at ABN in Amsterdam.