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Bucking the trend of issuers who have come to the institutional market as pro rata lenders pull back, Greater Media has refinanced a $200 million revolver into a larger pro rata deal with new relationship lenders, explained Ed Nolan, Greater Media's v.p. of finance. These new banks include SunTrust Bank, Rabobank, Citizens Bank, Credit Lyonnais, Sovereign Bank and Allfirst Bank. Nolan said the success of the deal was due to the company's good properties, low leverage and conservative management. "We looked like a relatively clean deal," said Nolan. The facility is in place for potential acquisitions, although Nolan said there is currently nothing in the pipeline.

Gulf Stream Asset Management, a Charlotte-based asset management shop, is in the market with its debut collateralized loan obligation, the $400 million Compass CLO 2002-1, and is ready to price notes within a week. President Mark Mahoney, who established Institutional Debt Management and was head of the capital markets group at Wachovia Securities and First Union, founded Gulf Stream in March this year. "We started marketing Compass in August, and utilizing a revolver we have been patiently warehousing assets," said Mahoney. The deal is approximately 50% warehoused, he added, noting Barclays Capital is the underwriter. "We have been buying in a very attractive period," he stated.

Hughes Electronics' recently amended bank loan poses a refinancing risk to lenders due to the loan's short tenor, according to Moody's Investors Service. Encountering a Dec. 5 maturity for its $2 billion revolving credit facility, Hughes pushed out the expiration date for the paper until either Aug. 31, 2003 or the close of Hughes' merger with EchoStar Communications, depending on which event comes first. In conjunction with the extension, Hughes also remodeled the credit into a $700 million revolver and a $600 million term loan. GMAC is the sole lender on an additional $500 million revolver. The loan has received a Ba3 rating from Moody's and is on review for possible downgrade pending the outcome of the proposed merger.

High-yield portfolio managers are being forced to bone up on the utility sector as downgrades send more and more issuers into their indices. With last week's downgrade of El Paso Corp. (Ba2/BBB) by Moody's Investors Service, they now must contend with the fact that two of the five largest components in the Merrill Lynch High-Yield Master II index are in the utilities sector (Williams Companies is the other). Utilities now comprise 7.9% of the index and have a market value of $32.2 billion. That compares to 4.8% and $13 billion just two years ago.

Banca Populare di Intra, a regional Italian bank, is in the market with a E486.5 million offering backed by residential and commercial mortgages. The deal, Intra Mortgage Finance 1, is being structured and lead managed by Credit Suisse First Boston, say market officials. Calls to the CSFB syndication desk in London were not returned by press time last Tuesday.

Lehman Brothers has released four people from its high-yield division- three in Europe and one in the U.S., according to a senior high-yield official with knowledge of the moves. The European cutbacks are a response to an overall weak environment for junk there, though the firm retains an estimated 15 people in high-yield trading, sales and research who are based in London, says the official. Among those let go is Mahtab Vanjanni, a London-based senior v.p. in high-yield sales. Chris Cooke, head of high-yield sales in London, referred calls to Stewart Prosser, a company spokesman, who says, through a colleague, that the firm has made "small adjustments across all divisions and regions to reflect the challenging environment."

Senior loan funds, hobbled by heavy net redemptions and relegated to the sidelines over the last 18 months, may be primed for a more active role in the loan investment markets. A more favorable environment is seen to be taking shape and should translate into more participation by the floating rate funds, market players said.

Mimi Eng, a v.p. in the structured product group at J.P. Morgan Securities, was recently laid off, says a collateralized debt obligation official at the firm. She was a CDO structurer, reporting to Romita Shetty, managing director and head of the global CDO business for the firm. Eng could not be reached for comment. Shetty did not return calls seeking comment on whether Eng's spot will be filled.

Issuance of sterling-denominated inflation-linked bonds will at least double in 2003, say London-based bankers, analysts and investors. Inflation-linked bonds have been relatively uncommon in the sterling market, but pent-up demand from pension funds and institutional investors is fueling increased interest from corporate and government issuers in the asset class, says Mark Capleton, bond strategist at Barclays Capital in London. As of last week, there had been roughly £1.5 billion in inflation-linked bonds issued this year and Capleton expects to see £3 billion plus next year--a conservative estimate. Barclays Capital is aggressively marketing inflation-linked bonds to its clients.

Two market value collateralized debt obligations managed by TCW are to be liquidated after the manager failed to stay in compliance with minimum net worth and overcollateralization tests, triggering an event of default. TCW Leveraged Income Trust (LINC) and TCW Leveraged Income Trust II (LINC II), which consist of high-yield bonds, leveraged loans and mezzanine debt, have been suffering from underperforming markets for several years, according to a buysider. He added though, the period between July and October this year was the nail in the coffin.

A sell-side analyst continues to see opportunities for total return investors in high-yield consumer products, but a portfolio manager sees the sector as fairly valued. George Chalhoub, analyst at Deutsche Bank and the top-rated consumer products guru on the 2002 Institutional Investor All-America Fixed-Income Team, is maintaining his buy on the sector in spite of recent sizeable gains. Among his top recommendations are Salton Inc, maker of Farberware, the George Foreman grill, and the Scooby Doo shower radio, among other products, and Samsonite. Salton's 10.75% notes of '05 (B2/B) were bid at 97.5 last Tuesday, up from 89 roughly a month ago. Chalhoub says the bonds should trade at 102 or 103. Samsonite's 10.75% notes of '08 (Caa2/CCC) were up to 82 from a 73 bid over the same period. Chalhoub sees the high 80s as fair value for the bonds. "The consumer has not retrenched as much as people thought, and from a credit specific standpoint these companies came into the second half much better prepared for low demand than people gave them credit for--both from a cost standpoint and in terms of inventory management," he says.

Blackstone Debt Advisors has priced the notes on its debut collateralized loan obligation, a $600 million vehicle called Hanover Square. More than half the collateral has been warehoused, and Blackstone is set to ramp up the remaining assets in a market primed for investors. The deal has been in the pipeline for most of the year, but the division of The Blackstone Group hit the market now due to the increasing spreads on deals. "We had a warehouse facility, but were not aggressive in our buying strategy until August. When spreads to high quality issuers became more attractive, we bought assets," explained Dean Criares, managing director and portfolio manager.