Search results for

High-yield sell-side technology analysts say it may be time for investors to bank some of the money they have made in the sector over the last few weeks, as revenues remain weak despite the recent bullish run of many bonds in the sector. Ziki Slav, analyst at Dresdner Kleinwort Wasserstein Grantchester, says he is likely to downgrade issues such as the Amkor 9.25% senior notes of '06 from "buy" to "hold". The issue was trading at 67 on October 7 when he put a buy on the name, and had climbed to 85 as of last Tuesday.

Asbestos names such as Federal-Mogul, Owens Corning and USG Corporation ticked up roughly three points each last week after Armstrong Holdings announced that it had gained the support of its asbestos personal injury claimants committee for its reorganization plan. Traders said that small pieces of Federal-Mogul traded in the 58-59 context, Owens Corning moved in the 57-58 1/2 range and USG was offered at 46, but no trades could be confirmed. There also have been recent reports that suggest asbestos liability will be limited, noted one dealer.

FCE Bank, Ford Motor Co.'s European financing arm, will come to market with another securitization from its Globaldrive program. The deal should total E500-750 million and is scheduled to be priced within the next two weeks. The deal, to be co-lead managed by ABN AMRO and Deutsche Bank, will be Ford's second securitization of euro receivables this year. A syndicate banker on the deal says the exact deal size is still being determined, declining further comment. Ford's last deal weighed in at E800 million and was priced in March at 19 basis points over one-month Euribor. However, given the soft nature of the European asset-backed market, bankers and analysts doubt the new issue will be priced as tightly.

Deutsche Bank, Bank of America, Lehman Brothers, BANK ONE and BNP Paribas have received commitments from senior managing agents for the $1.4 billion credit backing Ball Corp.'s $880 million acquisition of German container manufacturer Schmalbach-Lubeca, according to a banker familiar with the deal. Investors already have signed on to $250 million of the $350 million "B" term loan, and the rest of the tranches have been received positively as well, the banker said. Senior lenders contributing $50 million to the pro-rata portion received an upfront fee of 75 basis points. Bankers on the deal either declined to comment or could not be reached by press time.

Bank of America is providing a $125 million credit facility to help back DigitalNet's $223 million acquisition of Getronics Government Solutions. "The feedback on the credit has been extremely positive," said Craig Bondy, v.p. at GTCR Golder Rauner, the private equity firm sponsoring the deal. "I think it has a lot of momentum." A banker familiar with the facility agreed, adding that the credit was shaping up well, most likely as a club deal. B of A officials declined to comment.

GSC Partners Europe, a private investment firm specializing in debt, is developing a European collateralized debt obligation business and plans to launch its debut deal by the end of the first quarter. Peter Firth, director, says the first deal will be a E350 million collateralization of senior loans and the firm has already tapped Lehman Brothers as an underwriter. GSC Partners already has a E1.1 billion mezzanine debt fund and is getting into CDOs to expand its European business by capitalizing on its expertise in loan investing. GSC Partners Europe is the London-based subsidiary of Florham Park, N.J.-based GSC Partners, which manages roughly $6 billion.

High-yield portfolio managers are ready once again to invest in new deals, but bankers say supply will fall short of the renewed demand. The appetite, which is apparent from the success of recent new issues such as the $975 million deal from Dex Media East, and last week's $450 million 8.75% offering from Owens-Brockway, has translated into demand for companies producing free cash flow with a potential to delever.

A E6 billion multi-originator residential mortgage-backed securitization, Siena Mortgages III, is due to be priced the week of November 18. Stefano Spina, syndicate banker at the deal's sole arranger, MPS Finance, says price talk will be available this week. The deal is backed by assets from four Italian mortgage lenders, Monte Paschi Dei Siena, Banca Toscana, Banca 121 and Cariprato.

J.P. Morgan Fleming Asset Management, in a move to consolidate and cut costs, has let go five team leaders in its fixed-income team, according to BW sister publication Money Management Letter. Those released include Jay Gladieux, the top portfolio manager on its $12 billion broad-market fixed-income portfolio, Donna Lloyd, head of the liquidity sector team, Blake Witherington, head of credit research, John Fenn, head of the high-yield bond management team, and Thad Carlson, head of the Treasury and agency bond team. Additionally, Gilbert Van Hassel, head of global fixed-income, has been transferred to global head of technology and operations for investment management, and has been replaced by Seth Bernstein, cfo for investment management and private banking. Spoksman Darin Oduyoye said the five portfolio managers were let go because their positions had been eliminated. He declined to comment further.

Levels for Microcell Telecommunications' bank debt ticked up from the 20s to the 35-40 range last week as investors consider a restructuring for the Canadian wireless company. No trades could be confirmed, but one trader said, "Everyone is trying to sell it."

Nextel Communications' term loan "B" broke into the 90s last week, with trades taking place at 91 and 90. "If the bonds keep rallying, then there is no reason for the bank debt not to get stronger," one trader said, explaining that the company had been retiring $2.6 billion in debt by swapping the bonds for equity. And a Nextel spokeswoman noted that more retirement of debt is possible. "What our ceo and cfo have said publicly is that, just as we acquired investments opportunistically, we will also retire debt opportunistically," she said.

Oaktree Capital Management has closed on OCM Opportunities Fund IVb, a $1.339 billion distressed debt fund, and will be shopping for names over the next several months in a market awash with distressed paper. The completion of the new fund comes hard on the heels of its $2.1 billion OCM Opportunity Fund IV, which closed last December. "Fund IV closed quickly in 2001 with Oaktree's existing client base. Fund IVb, intended mostly for new clients, followed in 2002," said Howard Marks, chairman of the Los Angeles-based firm.