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At least three high-yield portfolio managers say they are considering adding to their cable sector allocations as the woes of Adelphia Communications have created considerable weakness in what had only a short time ago been one of the strongest sectors in all of high-yield. "We've been as conservative as possible to this point, but at some time, and maybe that time is now, there may be opportunity if you take a longer term view," saysPaul Ocenasek of Aid Association for Lutherans/Lutheran Brotherhood. Ocenasek says AALLB has a roughly 6% weighting in the sector, while he estimates other funds have a weighting of 8%. He says that while AALLB may eventually want to allocate as much as 10% to the cable sector, it will only do so once ongoing concerns about accounting issues are resolved.

Two high-yield portfolio managers say they no longer see value in the high-yield homebuilding sector, but a respected sell-side analyst says it is too soon to reduce exposure. One East Coast manager of over $1 billion says he is considering reducing exposure because he is concerned that eventual rate hikes by the Federal Reserve and a still cloudy unemployment picture could cause demand for homes to slacken.

Lehman Brothers last Tuesday launched syndication of a $1.05 billion refinancing for Six Flags Theme Parks, a deal that includes a repriced $600 million "B" loan. The current investor appetite for "B" paper and Six Flags' need to refinance within the next two years were the drivers behind the decision to return to the market, notedJim Dannhauser, cfo.

Extendicare Health Services is looking to take out its revolver borrowings and "A" and "B" paper through a $150 million senior note offering. The long-term care operator also is negotiating a new $100 million revolver, noted Philip Small, senior v.p. of strategic planning. "There is some debt that is due in 2003, and we see the market as good for healthcare high-yield right now," said Small. Replacing the term loans with notes extends the maturity to 2010 and leaves the revolver undrawn, he added.

Oren Cohen left Merrill Lynch last Wednesday, where he was a managing director and media analyst, to join Trilogy Capital, a New York hedge fund. "I feel I've done everything I set out to do on the sell-side. This is an opportunity to do something else," he says.

Merrill Lynch has hired Drew Nugent as a v.p. in its global asset finance group. Nugent will report to Michael Blum, the managing director who heads the origination team in New York. Nugent says he will be a transactor on non-real estate ABS deals, focusing on a broad range of asset classes. An ABS banker says Nugent is filling in a slot left vacant with the recent departure of Richard Burke for HSBC Securities (BW, 6/10). With the addition of Nugent, Merrill's global asset finance group in New York is comprised of seven staffers, including Blum, four bankers, one analyst and one risk manager. At Lehman, Nugent worked in the origination team, reporting to Diane Rinnovatore, managing director. He declined to discuss his former duties. Prior to working with Lehman, Nugent was an analyst with Fitch Ratings, specializing in aircraft securitizations. Rinnovatore did not return calls.

Merrill Lynch is reportedly trying to lure back Chris Birosak, just a week after letting go Jack Yang, co-head of leveraged finance. As first reported on LMW's Web site last week, Birosak would not be coming in as a replacement for Yang. Instead, he would join in an effort to bolster a team that has been whittled down over the past six months. The revolving door at Merrill has some wondering about the firm's commitment to the syndicated finance market. "The firm is going through turmoil," said a banker. "Re-hiring Birosak is an attempt to say Merrill is still committed to syndicated finance, but re-hiring one of five they got rid of seems symbolic." Merrill laid off 16 people -- including Birosak, Chris Johnson, Michael Senft -- from its U.S. leveraged group last November. Matthew Collins, global co-head of leveraged finance, resigned in February. A Merrill spokeswoman did not comment on any effort to bring Birosak back, but said, "Merrill is definitely not de-emphasizing the syndicated finance group."

ABN Amro Asset Management is looking at developing a sterling-denominated pooled corporate bond fund for its U.K. pension clients. Alan Higgins, London-based head of global fixed income, says the firm has not finalized plans for the new product, but is considering it in response to client demand. The new fund will likely invest exclusively in investment-grade bonds. ABN Amro Asset Management manages roughly $8 billion in fixed-income assets from its London office.

More than $40-50 million of Adelphia Communications' Century Cable facility changed hands in the 78-81 range after its operating company, Century Communications, filed for bankruptcy last week. The name had traded as low as 83 1/2 two weeks ago. "People are trying to find out where the right levels are now that it has moved into distressed," said one dealer concerning the trades. Market players also are trying to anticipate which of the company's operating subsidiaries is the next to file and when that will be. "That's the million dollar question," said one trader. Calls to Adelphia's spokeswoman were not returned by press time.

High-yield portfolio managers and a sell-side analyst say the high-yield auto parts sector has only a small number of credits worth betting on, in spite of two recent successful deals. Given issuers' propensity to grow largely through acquisitions, the potential for off-balance sheet financing is considerable, says a New York-based portfolio manager. Eric Green, high-yield portfolio manager at Penn Capital Management in Cherry Hills, N.J., says that while it is necessary to be particularly careful in this sector, he says there are still opportunities to pick up yield. He cites vehicle transport company Allied Holdings' 8.625% notes of '07 (Caa1/CCC+), which were trading at 82 last Monday, as one example of an issue he expects to appreciate further. Green would not say at what price he would sell the issue.

J.P. Morgan, Salomon Smith Barney and Morgan Stanley are leading the charge on a repricing for Resolution Perfomance Products that would shave 100 basis points off the LIBOR plus 33/ 4% the company is paying on its "B" term loan. A banker said the company is in aggressive de-leverage mode, and only about $225 million is left from the original $350 million "B" loan. The three banks held a meeting last week via conference call.

Two new collateralized debt obligations feature triple-A tranche pricing is tighter than the recent market has seen, and that pricing is expected to shrink further as investors increasingly opt to invest in CLOs over other structured vehicles. The triple-A notes for Atrium CDO 1, managed by Credit Suisse Asset Management, and Aurum CLO 1, managed by Stein Roe Farnham, priced at LIBOR plus 43 basis points last week, according to J.P. Morgan analyst Christopher Flanagan. He explained the pricing is due to healthy demand for CLOs accompanied by tight spreads in the underlying collateral markets. The spread over LIBOR is only two basis points lower than what the market had been seeing, but it is significant, buysiders said. "It definitely makes a difference, especially if you are paying a quarterly dividend," one CLO manager said.