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The announcement of operating losses from OM Group's cobalt metal products and uncertainty about covenant relief resulted in a downgrade by Moody's Investors Service. Ratings on both the company's $325 million revolver and its $600 million term loan "C" were lowered from Ba3 to B2 and are under review for a further possible downgrade.

The California Public Employees' Retirement System plans to invest $25-50 million in collateralized debt obligations in the coming months. The largest public pension fund in the U.S., with assets totaling approximately $136 billion, will likely make its first ever CDO investment before year-end, Mark Anson, cio, told sister publication Derivatives Week.

The California Public Employees' Retirement System plans to make its first investment in collateralized debt obligations in the coming months, according to BW sister publication Derivatives Week. CalPERS will likely invest $25-50 million before year end, according to Mark Anson, cio in Sacramento. CalPERS is the largest public pension fund, with assets totaling approximately $136 billion.

Andrew Langerman, a veteran collateralized debt obligation structurer, has left Deutsche Bank. A CDO market source says that Langerman left three weeks ago. Veteran Ted Meyer, a spokesman with DB, confirmed the departure but declined to comment. It could not be determined to whom Langerman reported. Brian Zeitlin, global head of CDOs, did not return calls. Calls to Langerman's residence were not returned. A CDO analyst at a rival firm says Langerman has been involved with CDOs since this market began in the mid 80s.

Three collateralized debt obligation bankers at CIBC World Markets--Tom Dial and John Shu, executive directors, and Chris Mowack, a director--were let go two weeks ago, says a senior securitization official at the bank. All reported to Ken Wormser, managing director and head of the New York-based asset securitization team. Wormser declined to comment. Another insider at the bank says the layoffs were based on the view that "the CDO business prospects are relatively weak today compared to two years ago."

CIBC World Markets has named Jacques Cornet as head of North American high-yield research. Cornet, a managing director who follows gaming, declined comment. He replaces Ed Mally, who was recently released from the firm along with at least two other analysts. The changes in research are part of a larger shakeup, as the firm rethinks its business strategy, according to people close to the situation who declined further comment. Walter McLallen, head of the firm's high-yield business, did not return calls.

The primary market picked up on the week as issuers took advantage of positive sentiment in the market to bring deals. In total about $7.8 billion in high-grade debt came to market, with notable deals from the bank and finance sector (Goldman Sachs, Lehman Brothers, Bank of New York, MBNA) as well as transactions from benchmark borrowers like Dow Chemicals, DuPont and Unilever. Signaling strong demand for perceived safe haven credits, Pepsi Bottling issued $1 billion 10-year notes at just 80 basis points over Treasuries. The calendar should pick up in coming weeks as issuers try to take advantage of the window between now and Thanksgiving to get deals done. Historically low borrowing rates, decent cash on the sidelines and uncertainty as we head into the new year provide powerful incentives to borrow now.

CreditSights, the independent fixed-income research provider based in New York, has hired two analysts to start up a London credit research effort, according to firm president Paul Ciasullo. The analysts, Anja King and Nehche Yazgan, were from Deutsche Bank's London investment-grade research group, and were added in response to European investor demand. King had been co-head of the investment-grade group for the past year. It could not be determined who would assume coverage duties for the two. CreditSights' staff now includes 14 senior analyst's covering both corporate and sovereign credits.

Deutsche Bank, Bear Stearns and Salomon Smith Barney finalized the structure for the $1.55 billion credit facility backing R.H. Donnelley's $2.23 billion acquisition of Sprint's directory publishing business at a bank meeting last Thursday. The credit, which is rated Ba3, will include a $125 million revolver, a $575 million "A" term loan and an $850 million "B" tranche, according to a source familiar with the credit. Pricing is LIBOR plus 31/ 2% on the pro-rata portion and LIBOR plus 4% on the "B" piece. Bankers on the deal either declined to comment or did not return calls by press time.

The bank debt of U.S. Can is said to have traded last Tuesday at the 82 level, continuing the downward trend that the paper has experienced over the past couple of months. Market players attributed the latest drop to investors spooked by the resignation of U.S. Can CEO Paul Jones. Earlier last week, market sources had quoted the market for the name anywhere from the mid- to high 80s to the 76-80 range.

Bank of America will be shopping an add-on term loan in the neighborhood of $150 million for Vanguard Health Systems in order to back its $295 million acquisition of five hospitals from Baptist Health System, according to a banker familiar with the situation. The term loan will add to the Nashville healthcare provider's existing $125 million revolver, which is led by B of A and co-documentation agentsWachovia Securities and GE Capital. A bank meeting is set for the first week in December, the banker noted. B of A officials declined to comment.

SpectraSite Holdings last week announced that it is pursuing a prepackaged bankruptcy plan to clean up its balance sheet, but the bank debt held at the operating level remained silent. While there was a rumor that a $3-5 million piece changed hands in the 84-85 range, most market players quoted the paper in the 82-84 context, where it has been resting for weeks.