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A bankruptcy court judge approved Adelphia Communications' $1.5 billion debtor-in-possession financing plan last Thursday, and traders said the bank debt would be better bid as a result of the approval. The new financing has a provision that allowed the banks on the company's existing facilities to receive $300 million in interest payments. The company's unsecured lenders tried to block the interest payments on the basis that the banks had constructed the loans to the Rigas family that sparked Adelphia's collapse.

Aladdin Capital Management's second collateralized loan obligation, Landmark II, is pricing this week via Banc of America Securities and Mizuho Bank. The 10-year, $250 million vehicle was downsized from $400 million due to a scarcity of quality assets in the market, according to an official familiar with the CLO. "It has definitely been a turbulent market," he said. Gilles Marchand, senior portfolio manager for Aladdin, declined to comment on the vehicle, which is set to close in mid-September.

Bank of America, J.P. Morgan, UBS Warburg and Morgan Stanley are taking a wait-and-see approach to pricing on Del Monte Foods' $1.6 billion bank deal, which is scheduled to be launched on Sept. 6. Pricing initially was expected to be LIBOR plus 21/ 2% and LIBOR plus 23/ 4% for the pro-rata and "B" piece, respectively, but this is now on ice as market conditions are evaluated, one banker said. Pricing is likely to rise to 23/ 4-3% over LIBOR to reflect the tougher market, he noted. UBS bankers declined to comment, and officials at the other three banks did not return calls.

Charter Communications' bank debt took a five- to seven-point hit last week after the company revealed that it received a grand jury subpoena from the U.S. district attorney's office for the Eastern District of Missouri. Following the news, small pieces of the name were said to have traded hands in the 80 1/2 - 82 3/4 range. The paper settled in at the 83 level by week's end.

Deutsche Bank continues to push through the exit financing for Dade Behring. In an effort to get the financing done, the bank has increased pricing on the $450 million "B" term loan by 75 basis points. A source said the credit, which includes a $125 million revolver, has been affected by a "pretty dramatic swing" in the market away from issuers and in favor of investors. Pricing on the "B" piece now rests at LIBOR plus 41/ 4%. A Deutsche Bank official declined to comment.

Qwest Communications International rallied from the 58-62 level last week after the company announced that it had completed the sale of its directories business, known as QwestDex. Traders quoted the company's bank debt anywhere from the mid-70s to the mid-80s earlier in the week, and trades were rumored to have been completed in the 80-82 range by week's end.

Prices for credit protection on Malaysia have fallen and volumes rocketed after Standard & Poor's upgraded the sovereign. Malaysian credit protection traded five to six times around the announcement on Tuesday, in comparison to a typical week where Malaysia trades about once a day. "Quite a number of trades went through," added a trader at Salomon Smith Barney.

BNP Paribas and Barclays Capital say the medium-term swap rate is overvalued and recommend investors take long and short exposure to take advantage. BNP is pitching a butterfly trade, which is where an investor would either purchase or sell swaptions in the middle portion of the curve and then do the opposite in the outer ends, or wings, of the curve. Barclays is also recommending a butterfly trade, specifically one executed with a straddle structure.

Credit-default protection on telecom companies tightened on Tuesday, grinding in even further Wednesday morning. The moves were sparked by the credits' improving equity performance and investors showed comfort that companies have begun to take needed write-downs from investments in third-generation licenses, said traders in London. In addition, Deutsche Telekom announced it was on track to report higher full-year earnings compared with last year, which tightened the price of its five-year protection to 270 basis points/280bps on Wednesday morning from 295bps/300bps on Monday, according to traders.

Charter Communications' bank debt took a five- to seven-point hit after the company revealed that it has received a grand jury subpoena from the U.S. district attorney's offices for the Eastern District of Missouri. The investigation is focused on Charter's current and disconnected customers and its policies and procedures relating to the capitalization or expense of various costs and related matters, according to a company statement. By midweek, the market for the name had sunk to the 80 1/2 - 82 3/4 range, with a couple of small trades occurring in that context. Callsto Kent Kalkwarf, cfo, were referred to a spokesman, who did not return calls by press time.

Valuation Inputs

A group of senior Bank of America equity derivatives executives that defected earlier this year are putting the final touches on their first hedge fund, Laurel Ridge Partners (DW, 2/26). The team, led by cio Van Nguyen, former business manager of the equity derivatives trading group at BofA in New York, is planning to launch the fund this quarter, as well as its offshore entity Laurel Ridge International, with USD200 million in committed capital from outside investors. Nguyen declined to name the investors but added that the firm is looking to cap the pair of funds at USD250 million.