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Lyondell Chemical's term loan "E" regained ground last week, changing hands in the 100 1/4 context after dipping below par the previous week. One trader said that technicals had caused the rally. "People thought the name had value at 98," he added. Others noted that the bank debt had risen with its bonds and market expectations for an economic recovery. "I don't even know why it was trading under par," another trader exclaimed.

Morgan Stanley last week deepened the original issue discount on a $245 million credit facility for Headwaters from 11/ 2% to a hefty 21/ 2% in an effort to close syndication ahead of the Labor Day weekend. Steven Stewart, cfo of Headwaters, said Thursday night the deal had not closed and no further update was available when LMW went to press Friday. As first reported on LMW's Web site last week, Morgan Stanley also increased pricing on the five-year, $220 million "B" term loan by 50 basis points to LIBOR plus 41/ 4% in order to attract more interest. A Morgan Stanley official declined to comment.

Lehman Brothers has priced the notes for INVESCO's new $300 million collateralized loan obligation, Saratoga CLO 1. The $228 million triple-A notes were priced at a respectable LIBOR plus 46 basis points, which is off the ultra-tight levels seen earlier this summer but well within those seen on a number of August deals. An official at INVESCO declined comment on the transaction. Calls to Lehman were not returned.

Plains All American Pipeline has amended its credit facility to allow room under its covenants for the acquisition of a crude oil pipeline in West Texas from Shell Pipeline, according to Al Swanson, treasurer. Among the covenant changes is a temporary relaxing of the company's leverage ratio. Until March 30, 2003, the company only has to meet a debt-to-EBIDTA ratio of five times rather than four times, Swanson noted. Plains All American drew on its credit to finance the $315 million acquisition, but it has since raised $145.1 million in the equity market to reduce its debt.

The $675 million Bank of America and Salomon Smith Barney-led credit for Rayovac Corp. is being eagerly watched as an indicator of market demand, as it acts as the first big deal post-Labor Day to be followed by a series of super-large institutional loans. The credit contains a $375 million "B" piece priced at LIBOR plus 31/ 4%, but some bankers and investors are suggesting that may be on the low end and they are anxious to see if it clears the market and sets a post-Labor Day bar for the credits to follow. "Considering the leverage, this should be at least 31/ 2% or 33/ 4%," one banker said. The loan is rated Ba3 and the ratings outlook is negative, he noted. Another said, "The summer blip is unlikely to be a one-off, and we can expect double-B deals to price north of 350 basis points."

The bank debt of cable companies received a five- to 10-point boost in the secondary market following the news that RCN had sold its New Jersey-area cable systems for $245 million. "It's the first time the market has seen a valuation of a cable property in a long time," one trader said, adding that the market received the news positively.

Collateralized debt obligation equity investors are demanding principal-protected securities against credit risk. Arturo Cifuentes, managing director at CDO collateral manager Triton Partners, says principal protected securities are "an old trick" that has reappeared in more and more deals over the past few months. However, with U.S. Treasury bonds trading at high dollar prices, protection has a high cost attached to it, says a CDO analyst with a leading underwriter.

The bank debt of Conseco was said to have traded in the low 60s last week, shooting up from the 52 level where it had been trading since the company announced that it would have to pursue a more aggressive restructuring plan. Market players have mixed feelings about the name. "The story is still unfolding," one dealer said, predicting that the paper would remain in the 60s for at least another month. "It's hard to value," he added.

Dade Behring's new $575 million senior secured credit facility has received a preliminary B+ rating from Standard & Poor's, with the recovery value of the loan expected to be greater than 50% if the company was sold in a simulated bankruptcy scenario. The company recently negotiated a pre-packaged bankruptcy plan and will cut its debt by some $700 million to roughly $800 million, reducing its debt-to-EBITDA ratio to three times.

Fleet Bank and Bank of Nova Scotia launched syndication of a $475 million credit facility for Flexi-Van on Aug. 28, during a quiet week for new issuance. The credit refinances existing debt and backs the Kenilworth, N.J., company's $180 million acquisition of the chassis leasing businesses of GE Capital's TIP unit, a banker said. The acquisition needs to be completed by Sept. 17, which is why the deal was launched at the end of August, he noted. A Scotia banker declined to comment. Calls to officials at Fleet and Flexi-Van were not returned.