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Despite the extension on collateral requirements given last week to NRG Energy from its lenders, fixed-income analysts on the buy- and sell-sides say the banks may still decide to pull the plug on the independent power producer. Even those who believe the banks are unlikely to force the company into default say that such an event would cause another wave of selling in the IPP sector--just as bond prices are showing signs of a recovery. "A nation of sheep is investing in these things. It would not be a positive development," says one East Coast buy-side analyst.

High-yield portfolio managers are once again looking at high-grade names, as the recent stock market rally has had a more demonstrative effect on the high-grade market than on high-yield. These names began seeing interest from high-yield portfolio managers as early as May (BW, 5/26) but have dropped in price considerably since then.

Deutsche Bank hired Tim McDevvitt and Rich Willard to be investment-grade traders on their New York corporate bond desk. The two resigned last Friday morning from Merrill Lynch, according to a person close to the situation. They will report to Stephen Murphy, head of U.S. corporate bond trading, says Ted Meyer, a firm spokesman. Meyer says he is uncertain as to what sectors they will be responsible for. A call to Merrill Lynch to determine possible replacements was not returned.

At least one high-yield gaming analyst and one portfolio manager believe a planned $350 million junk deal by Wynn Resorts to build a Las Vegas casino called La Reve will provide an important gauge of the market's interest in buying new paper. The deal, set to hit the road after Labor Day, is sure to attract attention, if only because, in the words of one analyst, "Steve Wynn is about as close as you get to God in high-yield gaming." While gaming paper has been in favor through most of the economic slump, only one project finance deal has been sold in the sector this year. The analyst believes Wynn will be able to pull it off because his name will carry weight with investors.

Norddeutsche Landesbank (NORD/LB) has added Hervy Dawit as an asset backed securities transactor for its conduit business and is seeking a senior ABS credit analyst, says Omar Bolli, senior v.p. and head of asset-backed finance.

The high-yield market was on fire last week as of Thursday's close, particularly Wednesday and Thursday. Rallies came in a wide range of sectors, and traders saw a great deal of short covering. Here is selected action.

Though the market appears to view initial concerns over the Aug. 14 earnings restatement by Household International as overblown, at least one independent analyst remains troubled by the news. Meanwhile, a sell-side analyst who has been bullish on Household all year continues to see major upside in the bonds.

HSBC has hired one of Abbey National's asset-backed portfolio managers for its London-based structured investment vehicle team. Andrew Jackson will join HSBC shortly and will report to Dominic Swan, head of structured investment vehicles, according to an official at the firm. Swan was on vacation last week and could not be reached for comment.

Greg Drennen, the manager of the $9 billion securitized product account at New York hedge fund The Clinton Group, says that his remarks about Credit Suisse First Boston's mortgage-backed security group in the Sales Professional Of The Year Award (BW, 8/19) were taken out of context. Drennen says that he did not mean to imply that he has ceased transacting business in MBS or asset-backed securities with CSFB because of sales pro Tom Corrnachia's departure, and that "the way the remarks were presented might give the impression that this is the case." Drennen says that his only intent in making the remarks was to convey a deep personal and professional respect for Cornacchia's efforts as a salesman, regardless of the firm he is working at.

Merrill Lynch's director of emerging markets fixed-income research has left the firm. Matthew Vogel, who covered Eastern Europe and Turkey, is said to have joined Barclays Capital in London, according to several people familiar with the move. Vogel's new role at Barclays could not be learned. Vogel was the most-senior emerging markets strategist in London and reported to Tulio Vera, head of emerging markets fixed-income research in New York. Calls to officials at Barclays were not returned. Vera was on holiday and could not be reached for comment.

OppenheimerFunds has added John Johnson, a high-yield analyst, to cover media and financial credits, according to Tom Reedy, co-head of high yield with David Negri at the New York-based money manager. Johnson replaces an analyst who left the firm some two months ago. Reedy says the firm is interviewing to replace another analyst who left some two months ago. The new hire will follow telecom and cable. He declined to name the two analysts who left.

Citibank/Schroder Salomon Smith Barney's only European securitization analyst, Shaker Sundaram, has left the firm. Sundaram has joined UBS Warburg's London-based fixed-income distribution team as a salesman specializing in asset-backeds, according to UBS officials. The position is newly created. Sundaram reports to Emmanuel Bucaille and David Wishnow, co-heads of bank and insurance sales. Calls to officials at SSSB were not returned.