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Recent gains in the bonds of Tesoro Petroleum have a sell-side analyst advising investors to take gains in the event of a short-term run up in the bonds, while another has a hold on the name. A New York-based buy-side analyst plans to steer clear of the entire refining sector, but says if he owned Tesoro's bonds he would sell them.

Atlantic Asset Management, a Stamford, Conn.-based fixed-income manager with about $7 billion in assets under management, is up for sale, according to a client of the firm and an asset management banker familiar with the situation. David Weaver, v.p. of investments for $175 million Kansas State University Foundation, which is a client of Atlantic, said the firm informed the foundation that it was up for sale several weeks ago. Atlantic oversees a $6.5 million high-yield portfolio and a $68 million core fixed-income portfolio for Kansas State University Foundation. Weaver said the foundation has not considered terminating the firm in light of the sale. Atlantic specializes in investment-grade and high-yield debt portfolios, including collateralized debt obligations. The banker said that the firm's parent company, Industrial Bank of Japan, which purchased Atlantic Asset Management about two years ago, has put the firm on the block because it wants to get out of the asset management business. "They haven't owned the firm for that long, but it wants out of the business," the banker added. Elaine Hunt, senior v.p. and a founding partner of Atlantic, did not return calls seeking comment. John Dorman, spokesman for IBJ, also did not return calls.

BlackRock Financial Management is preparing its second real estate collateralized debt obligation of the year--a $290 million deal set to price before Thanksgiving, says a CDO market official. The notes will be backed by a mix of 77% commercial mortgage-backed securities, 20% REITS and 3% commercial loans. The average rating in the collateral pool is double-B. Called Anthracite CDO II, the transaction is co-led by Deutsche Bank and Morgan Stanley. Calls to Brian Zeitlin, head of global CDOs at Deutsche Bank, and to Jon Strain, head of the CDO syndicate desk at Morgan Stanley, were not returned. Andrew Phillips, an MBS portfolio manager at BlackRock, did not return calls.

U.K. building societies are increasingly studying securitization as a funding option. Treasury officials at Yorkshire Building Society and Skipton Building Society say that while they are still not ready to jump into the market, they are not ruling out residential mortgage-backed deals as an alternative fund raising tool. Officials at both societies say the are not in need of funding at the moment, but potentially could issue RMBS deals in the future, probably starting with non-member assets.

Most collateral managers of collateralized debt obligations will be able to avoid consolidating special purpose entities onto their balance sheets under new rules that will be proposed soon by the Financial Accounting Standards Board, legal and accounting experts with knowledge of the rules say. Treating SPEs as separate accounting entities is one of the major benefits of securitization and is seen as imperative to sustaining a healthy CDO pipeline. Previously, it was thought that most participants in a CDO would be forced to consolidate SPEs onto their balance sheets. "It looks like it's going to be okay for the CDO market," says Dan Castro, head of structured finance research at Merrill Lynch. He adds that, "Some of the provisions that might require some work will be minor and people will be able to work around them."

CenterPoint Energy's new loan zipped up to 105 in its first week of trading, leaving bank loan players agog. The deal's hefty LIBOR plus 93/ 4% pricing and 3% LIBOR floor was a hit with investors. But some bankers said the company, which desperately needed the financing to avert a potential Chapter 11 filing, was skinned by Warren Buffett's Berkshire Hathaway and Credit Suisse First Boston. "Bank debt should not trade out of the box at 105," said one dealer, making the point that the deal was too richly priced.

CIBC World Markets and General Electric Capital Corp. have at least two tickets in hand after a Nov. 8 bank meeting for Therma-Tru. The $305 million credit facility for the fiberglass door maker refinances existing bank debt, said a banker familiar with the deal. The line is split between a $75 million revolver priced at LIBOR plus 23/ 4% and a $230 million "B" loan with a LIBOR plus 31/ 4% spread. Agent banks also receive a 75 basis point fee on the revolver and 25 basis points upfront on the "B" piece, he noted. A CIBC banker declined to comment, while a GE banker did not return calls.

Banco Espirito Santo's debut residential mortgage-backed securitization will hit the market next week, says Adrian Carr, head of syndication at Credit Suisse First Boston, one of the lead managers. Called Lusitano, the E1 billion deal, will be roadshowed this week, says Carr. Deutsche Bank is also a lead manager on the deal.

Sal Abbatiello has resigned from his position as head high-yield trader at RBC Capital Markets to start a new dealer firm with a former colleague trading distressed, high-yield and crossover securities. Abbatiello says cutbacks at other firms have created an opportunity to snap up a lot of veteran high-yield talent. The firm, called Libertas Partners, has five employees so far, but plans to hire 15 more people by the second quarter of next year. Abbatiello, the coo and president, will focus on sales, while Gary Katcher, who resigned from RBC as head trader last year (BW, 4/15/01), is the ceo, and will oversee the firm's trading business. Based in Greenwich, Conn., Libertas will focus exclusively on sales and trading, though Abbatiello says that if they find an investment banker with good client contacts, underwriting could be a possibility.

RCI Banque, the captive auto loan provider for Renault, plans to securitize part of its German auto loan book, says Veronique Dosdat, head of banking relationships and structured finance at RCI. The deal will not happen until next year and the bank aims to bring one E1 billion deal to market per year each year going forward and will use German assets in 2003, because, after France, Germany is Renault's largest market. Last month, RCI Banque brought its first auto loan asset-backed securitization, a E1.4 billion deal, backed by French receivables.

R.H. Donnelley's $1.6 billion credit facility backing the acquisition of the Sprint Publishing Assets (SPA) is bolstered by the directory business' trademark as collateral for the bank debt. "What's valuable about the acquisition is the trademark," noted Moody's Investors Service senior credit officer Christina Padgett. Moody's has assigned the credit a Ba3 rating. The Sprint trademark will be contributed to a bankruptcy remote Special Purpose Vehicle and if a different carrier were to purchase any Sprint assets, the buyer would assume Sprint's obligations with respect to R.H. Donnelley. "You want to make sure that you have access to that trademark," said Padgett.

TD Securities and Credit Suisse First Boston have filled the "B" piece for Tucson Electric Power and then some, with close to $400 million in commitments, said a banker familiar with the deal. The $200 million "B" loan closed late last Wednesday, while the rest of the pro rata -- a $60 million revolver and $140 million "A" term loan -- are set to close this week. TD and CSFB are waiting on a couple more commitments, he said. Pricing was flexed up a hefty 2% on the "B" tranche to LIBOR plus 51/ 2%, while the deal was sold with a 1% upfront fee. Pro rata pricing increased 1% to LIBOR plus 4%, he noted. Additionally, the banks threw in six-month call protection at 101, a buysider said. Bankers at TD and CSFB declined to comment and officials at Tucson did not return calls.