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CIBC World Markets held a bank meeting today for Integrated Defense Technologies for an amended and restated credit facility backing the $146 million acquisition of the Gaithersburg, Md., operations of BAE Systems. The existing $45 million "B" term loan will be rolled into a new $175 million tranche, one banker said. Pricing on the existing loan is LIBOR plus 2 3/4%, but this will be hiked up to LIBOR plus 3 1/4% once the new cash is incorporated. CIBC also leads a $40 million revolver and a $40 million "A" term loan for Integrated.

GE Capital, SunTrust Bank and Comerica Bank are shopping a $150 million bank facility for 21st Century Newspapers, a Michigan-based publisher of newspapers and publications. The credit backs the acquisition of the newspaper assets of Brill Media and consists of a $30 million revolver, a $45 million "A" term loan and a $75 million "B" piece. Pricing across the board is LIBOR plus 4%, one banker said, noting that Van Kampen Investments has already signed onto the deal. Officials at the banks either declined to comment or did not return calls. A spokeswoman for 21st Century did not return calls.

UBS Warburg has set pricing on the $635 million bank deal for Zurich-based Centerpulse, formerly Sulzer Medica. The $335 million "B" piece is priced at LIBOR plus 3 1/2% with a commitment fee of 25 basis points, while the $300 million "A" term loan holds a spread of 2 3/4% over LIBOR, one banker said, noting that both tranches are split equally between U.S. dollar and Euro-denominated portions. The meetings in New York and Zurich were well attended, the banker noted, although commitment levels so far could not be ascertained.

J.P. Morgan, UBS Warburg and Goldman Sachs are tentatively setting aside Oct. 4 as the launch date for syndication of a $325 million credit facility backing the $620 million leveraged buyout of the waterworks distribution business of United States Filter by Thomas H. Lee Partners and J.P. Morgan Partners. The bank financing consists of a $75 million revolver priced at LIBOR plus 3% and a $250 million "B" term loan with a spread of 3 1/2% over LIBOR. The buyout also will be financed with $200 million in subordinated notes, according to a banker familiar with the transaction. Officials at the banks either declined to comment or did not return calls.

Ambac Assurance Corp. has suspended writing credit protection on pools of corporate obligations that include standard or modified restructuring language because it does not think its concerns over the definitions are being satisfactorily addressed. In an e-mail to the International Swaps and Derivatives Association's end user committee, Michael Schozer, managing director and head of structured finance and credit derivatives at Ambac in New York, said, "We have decided to suspend writing new business with the standard Restructuring language, even at the "super AAA" level."

Thank you for your report of the response of the banks and dealers to our proposed Restructuring language.

THE FOLLOWING MESSAGE IS FROM TRACY HAWKINS AND PASCALE VIALA:

Bank of America's Kenichi Tatsuzawa, head of global markets for Japan, and Koichi Kanaya, head of sales, both based in Tokyo, have resigned, according to Kanaya. The firm has experienced a string of difficulties in Japan. Earlier this year William Fall, global head of structured products in London and the regional head of the global markets group, told DW, "There was a false start," in establishing the credit group. BofA also closed down its equity derivatives business in Japan and Korea (DW, 3/8).

Energy names such as Enron and El Paso Energy have sparked the secondary market this week with big chunks of each name changing hands. A $20 million piece of Enron was auctioned by Societe Generale at the 13 1/2 level, as recent reports indicated that the company's former CFO, Andrew Fastow, would be indicted as early as next week. Calls to Enron and SocGen were not returned by press time.

A series of sham electricity option trades Merrill Lynch entered with Enron in late 1999 that allowed the latter to book a fictitious USD60 million profit have come home to roost, reportedly resulting in the termination two weeks ago of Dan Gordon, Allegheny Energy's president of energy trading, according to an official familiar with the situation at Allegheny. The deal, which was first reported by The New York Times last month, apparently infuriated Allegheny's management because it raised awkward questions over the valuation of two acquisitions: the three Midwest peakers Allegheny bought from Enron in November 2000 and Merrill's energy trading team it purchased in January last year. Gordon, who was terminated as president of Allegheny's energy trading group on Sept. 5, was previously head of Merrill's energy trading team and took the Enron trade to senior Merrill management to get it signed off.

Below is a summary of the most important statistics from the British Bankers' Association's 2001/2002 survey of the global credit derivatives market.

Teck Cominco, a Canadian mining and refining concern with USD1 billion in outstanding debt, is considering entering an interest rate swap to convert part or all of a fixed-rate bond it recently sold into a synthetic floating-rate liability. Larry Mackwood, treasurer in Vancouver, British Columbia, said he is monitoring the swaps market and would pull the trigger on a fixed-to-floating swap referenced to a recent USD200 million bond offering if pricing improves. "We want to do it as cheap as possible," he said, noting the company has used interest rate swaps in the past but is not an active user.