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The roughly $20 billion pension fund of BellSouth has hired Credit Suisse Asset Management to run its second investment in distressed debt. Alan Gasiorek, executive director of trust investments, said the fund chose CSAM because of its investment philosophy. "We like that they go for control," he said. "They're long-term players that look to create value." Although BellSouth committed to make the investment some nine months ago, the fund only recently hired a manager because it experienced several hiccups in the process, which Gasiorek declined to discuss.

Bankrupt Williams Communications Group's bank debt jumped from the 72-74 range to the mid- to high 80s last week after Level 3 Communications was reported to be making a $1.1 billion bid for the company. This offer would take the Williams Communications bank debt out at par. Dealers said investors are still unsure if the deal would be completed. No trades could be confirmed. A spokeswoman for Williams Communications said the company had received a number of bids, one of which was from Level 3. While she could not elaborate, she noted that the company was looking to release a plan of reorganization soon.

Boyd Gaming has secured a $187.5 million "B" term loan to replace an undrawn bridge loan backing the construction of Borgata, a resort and spa in Atlantic City, N.J. It was necessary to obtain the "B" loan because the cost of using the bridge loan would have grown increasingly expensive with time, said Ellis Landau, cfo. In addition, the Las Vegas gaming company wanted to put in place a longer-term loan, which the institutional market was willing to provide, he explained.

There were many more downs than ups last week, as even Wednesday's equity rally failed to give junk credits much of a lift. A number of fallen high-grade energy credits fell solidly into high-yield.

Jonathan Kattouf, HSBC Securities' investment-grade telecom, media and cable sector trader, has left the firm. A trader on HSBC's corporate bond desk confirmed that Kattouf had departed and that no immediate successor had been designated, noting that his responsibilities had been divided up among the remaining traders. Ferdie Masucci, the head of the firm's corporate bond business, was on vacation last Friday and unavailable to comment. Kattouf could not be reached to comment.

James Nimberg, a mortgage backed securities analyst at Credit Suisse First Boston, has accepted a new position as an interest-only/principal-only trader at J.P. Morgan Securities. Kevin Finnerty, the head of MBS at J.P. Morgan, says Nimberg will fill the slot created by the departure of Matt Weinberg, who left several weeks ago for Lehman Brothers (BW, 6/16). "We think he'll be pretty good given his five years of research experience at CSFB," says Finnerty. Nimberg will report to Alan Galishoff and work alongside Jay Fiacco, a more veteran IO/PO trader. J.P. Morgan was the winner of the most improved trading desk award in BondWeek's inaugural MBS survey (BW, 5/21).

Jeff Higgins has been released from J.P. Morgan Securities, where he was a senior high-yield trader, according to traders on the buy-side and at rival firms. Prior to joining J.P. Morgan, Higgins was a high-yield trader at Banc of America Securities and a government bond trader at Merrill Lynch. Scott Dolph, co-head of high-yield trading at J.P. Morgan, declined comment, and Higgins could not be reached.

Syndication of a $210 million bank facility for Kinetic Systems was postponed indefinitely in the wake of turbulent equity markets that have shelved its planned initial public offering. The credit was slated to consist of a $60 million revolver and a $150 million institutional tranche. Proposed pricing could not be ascertained at press time.

Marty Fridson, chief high-yield strategist at Merrill Lynch, has spoken out in defense of short sellers who were the subject of griping attributed to Bill Gross in a recent article published in Barron's. The activity of short sellers in the credit market has occasioned a number of complaints among mutual fund managers, and Fridson's defense drew notice. According to the article, Gross accused hedge funds of driving down bond prices, provoking downgrades and forcing selling from investment-grade money managers. Gross did not return a call seeking comment.

Mike Meyer, who was fired from Merrill Lynch in 1998 after being held responsible for $10-20 million in losses, and who joined Banc of America Securities last week as head of U.S. corporate bond trading, also reportedly caused up to $75 million in losses at UBS Warburg, the firm he left to join B of A.

Dave Rubulotta, has joined Salomon Smith Barney as a v.p. and high-yield salesman.

Standard & Poor's has downgraded Dynegy from BBB- to BB due to concern over the erosion in the company's core merchant energy business. Waning incremental cash flow, hurt by decreased market opportunities and lower power prices, has led to weakened credit protection measures more commonly associated with double-B credits.