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This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

The drought in the primary corporate market continues with just $3 billion of investment-grade and $700 million of high-yield deals coming to market in the last week. This marks the seventh consecutive week where total volume has been less than $10 billion. This week's totals were only bolstered to the degree that they were by $1 billion deals from IBRD and Safeway, but issue sizes away from these deals were so small that the moving average of deal size fell during the week. With August typically the quietest month for debt issuance, a near-term rebound in volumes is not likely.

Moody's Investors Service has downgraded the senior debt rating of PG&E National Energy Group (NEG) from Baa2 to Ba2, citing the company's near-term liquidity issues, declining operating performance and negative prospects for wholesale energy merchant prices.

Morgan Stanley, a second-tier player in the mortgage-backed securities market, is beginning to make its presence felt in the collateralized mortgage obligation sector. The firm, which did not do any transactions last year according to Bloomberg, has done nearly $5 billion worth since the beginning of July. The catalyst for this shift, according to several CMO investors, has been the addition of agency CMO trader Pat Russell from Credit Suisse First Boston early last month. Indeed, a memorandum sent from Russell to the firm's account base last week thanked them for helping launch nearly $5 billion in new agency production and noted that they had traded $4.5 billion on the secondary market.

Loan traders will be legally bound to oral agreements on trades now that New York GovernorGeorge Pataki has signed an amendment to the New York State Statute of Frauds. The amendment, signed last Wednesday, eliminates the requirement of a signed agreement to bind parties to a trade. "You are legally bound to close the trade if you reach an agreement on the phone," said Jane Summers, general counsel for the Loan Syndication and Trading Association (LSTA).

PIMCO reportedly sold at least $500 million of Ford Motor Co. bonds earlier this month, according to a senior trader and a salesman at separate sell-side firms. The sale, which was in varying maturities, was seen as one of several factors that drove the 7.25% notes of '11 to as wide as 420 basis points over Treasuries last week. The bonds had spent much of the year in the 200-250 range, and were at 190 as recently as late May.

Iroquois Gas Transmission System has eschewed the bank market and instead is offering $170 million of senior notes via a private placement in order to finance the ongoing construction of its Eastchester Extension and Athens Expansion projects. "We could have used bank facilities, but we wanted longer-term financing," explained Paul Bailey, cfo of the Shelton, Conn., pipeline company. Proceeds from the notes, led by J.P. Morgan and co-managed by TD Securities and Bank of Montreal, will also pay off a term loan, which then will be converted into a revolver, he added. The bank loan is led by J.P. Morgan and was put in place in 2000, he noted.

There was no noticeable change in bank debt levels for Qwest Communications International last week despite intensifying bankruptcy fears. Traders quoted the name in the 58-62 range, but they said the paper had not changed hands. The company is in dire need of liquidity and it must avoid violating its bank covenants at the end of the year, when its maximum allowable debt-to-EBITDA ratio drops from 4.25 times to four times.

Regal Cinemas' recent amendment to its bank facility has caused some concern at Moody's Investors Service, since measures designed to protect investors have been removed or weakened. "The concern is that the [movie-theatre] industry is not out of the woods yet," said analyst Russell Solomon. There are still too many screens relative to attendance, even though many theater companies have moved through the Chapter 11 restructuring process. "The box office has been unusually strong, and this makes marginally profitable theaters look good," he explained. "The box office is fickle and, though we think the pipeline for the rest of the year is positive, you could see a dip leading to deteriorating operating performance," he added.

Investors in energy company bank debt increased their focus on trying to unload paper last week, but finding buyers has been difficult and very little paper actually changed hands. Maturing debt and Securities and Exchange Commission investigations have had the spotlight on energy bank debt for some time, but investors started paying more attention last week as some of the companies started to issue earnings reports, traders said.

Peter Quinn has resigned from J.P. Morgan Securities, where he was a v.p. and high-grade utility analyst, to join Goldman Sachs in a similar capacity, according to analysts familiar with the situation. He replaces Robert Rubin, who left for Deutsche Bank earlier this year. Quinn could not be reached for comment and his new title could not be determined. A call to Paula Dominick, head of credit research at Goldman Sachs, was not returned.

Solutia has extended its credit facility and reduced its borrowing capacity but will pay a steep price--an extra 400 basis points--for the change. The bank loan was to exire on Aug. 13 but will now expire in August 2004. In addition, the total credit was reduced by $200 million because the company did not need the excess borrowing capacity, explained Kevin Wilson, treasurer.