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The European secondary asset-backed market has been "subdued" as investors and dealers alike have been inundated by new issuance, say London-based ABS traders. One investor says he has been looking at every new ABS deal that comes across his desk--roughly E6 billion worth over the past three weeks--and has not been able to look at secondary market trades. "There are some secondary positions that look interesting, but our resources are really stretched right now. I'll look at them later," he says.

Merrill Lynch is in the process of merging its cash flow and synthetic collateralized debt obligation businesses, according to a senior banker at the firm. The change is being done to avoid "double pitching" the same collateral managers and investors for business. The banker says that an internal memo announcing the change was imminent as of last Wednesday.

PIMCO is marketing its second European collateralized debt obligation, which is set to be priced in the coming weeks. The E264 million deal, called Euro Multi-Credit CDO, will feature euro-, sterling- and dollar-denominated securities, say bankers familiar with the deal. The CDO will be backed by asset-backed securities, and will represent PIMCO's third CDO of ABS. PIMCO will use euro-denominated asset hedges to manage its foreign exchange risk. Calls to Mark Hudoff, London-based CDO manager at PIMCO, were not returned.

Lyondell Chemical's bank debt popped up above par on the buzz that the company would issue senior secured notes to take down part of the company's "E" term loan. The "E" loan was being bid in the 100 1/2 range, but it could not be determined if any paper had changed hands. The loan was being bid in the 98-99 range prior to the news. A non-call provision on the term loan "E" expired last May, but the "E" still has call protection at 102. "I expect Lyondell to pay down about three-quarters of the loan, at 102," said a buysider.

Stone Ridge Investment Partners recently increased its allocation to the Ford Motor Co. 7.25% notes of '11 even though they have tightened from 605 basis points over Treasuries on Oct. 9 to 385 over last Monday. David Killian, portfolio manager at the Malvern, Pa., firm, says that if the equity market has indeed found a bottom, Ford's pension liabilities become less of an issue. Stone Ridge had lightened up before spreads reached their peak, and with a $2 million purchase when spreads were 400 off, is now close to a 5% position in Ford--its maximum allowable holding in a single credit. Killian says he does not have a specific spread level in mind that will make him consider selling Ford again.

Qwest Communications bank debt held its ground despite reports that bondholders are protesting the terms of the company's most recent exchange offer. Traders said the market for the name was in the 93 range, but no trades could be confirmed. Two weeks ago, immediately following the news that the company was pursuing an exchange, the paper changed hands in the 92 context.

Salomon Smith Barney and Credit Suisse First Boston last Tuesday launched a $331.9 million bank-debt package backing Texas Pacific Group's $675 million acquisition of Gate Gourmet, Swissair Group's airline catering business. Fort Worth-based TPG received the nod from a federal bankruptcy judge to purchase Gate Gourmet in October. The credit consists of a six-year, $150 million "B" loan and a $58.6 million, six-year "B" piece for European investors. Pricing on the institutional tranches is LIBOR plus 41/ 2%. The pro rata is broken down into a $50 million, multi-currency, five-year revolver and a $73.3 million Euro "A" loan, also with five year tenor. The spread is LIBOR plus 4% with a 1% facility fee on the revolver. Bankers at CSFB and Salomon did not return calls for comment.

Bank of America, Key Bank, Merrill Lynch, and Morgan Stanley are scheduled to close The Timken Company's $875 million line by Thursday. The line backs the Canton, Ohio, bearing manufacturer's $840 million purchase of Ingersoll-Rand's Torrington subsidiary. Bankers familiar with the deal said BANK ONE has signed onto the five-year, $500 million revolver as co-documentation agent with a $50 million ticket. The credit also includes a $375 million, 364-day revolving bridge-to-bond piece, with both tranches priced at LIBOR plus 11/ 2%. The BANK ONE commitment was the only one that could be confirmed and officials at the banks either declined to comment or did not return calls. It could not be determined whether the loan is underwritten.

Small pieces of Centennial Cellular and Western Wireless paper were said to have traded up last week from the high 60s to the 72-74 and 73-75 ranges, respectively. Wireless names have gained roughly 10 points as a whole over the last month and tower names are up about three to five points, noted one trader. Market players point to the stellar performance of industry-bellwether Nextel Communications as well as a generally more positive sentiment for telecom and related credits.

Xerox Corp.'s bank debt received a boost after investors digested the positive comments that the company's chairman and ceo, Anne Mulcahy, gave at an annual investor conference last Monday. Across the board, the company's bank debt was roughly two points higher, according to traders. Xerox's revolver was quoted in the 84 1/2 86 range. The market for the term loan "B" was at the 95-95 3/4 level, and pieces of the "A" paper are rumored to have changed hands in the 92 1/2 - 93 1/2 context.

GMAC-RFC Securities has hired Street veteran Michael Youngblood to head up its fledging research effort. Youngblood, whose first day is today, will be responsible for heading up GMAC-RFC's research in the mortgage-backed securities sector. Youngblood declined to comment. He will report to Rod McGuinness, the firm's president, and will issue relative-value opinions, develop indices to track the various MBS the firm issues as well as authoring a market surveillance report. Youngblood will be based in the firm's Bethesda, Md., office. GMAC-RFC is slated to receive Federal Reserve approval within the year to securitize and underwrite the loans it makes, according to an individual familiar with the firm. To date, the company has issued $27.3 billion in MBS and asset-backed securities.