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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fixed-income, has been transferred to global head of technology and operations for investment management, and has been replaced by Seth Bernstein, cfo for investment management and private banking.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.

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.