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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 this week. The name had traded as low as 83 1/2 last week. "People are trying to find out where the right levels are now that its moved into distressed," said one dealer concerning the trades. Market players are also 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.

J.P. Morgan and Bank of America are in the market with a $1.25 billion redux for Community Health Systems, a Forstmann Little & Co. firm, and are looking for a major price cut on the institutional tranches. The current "A," "B" and "C" tranches are priced at LIBOR plus 3%, 3 1/2% and 3 3/4%, respectively. But the banks want to roll those lines into one $800 million "B" tranche priced at LIBOR plus 2 1/2%. A $450 million revolver is also being refinanced, said a banker. Community Health operates full-service, acute care hospitals in nonurban areas where CHS is typically the prominent primary health care provider.

Lehman Brothers on Tuesday launched syndication of the $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, noted Jim Dannhauser, Six Flags CFO. "We wanted to enter the loan market when it is attractive, while in the fourth quarter of 2004, the "B" begins to amortize and the revolver commitments would have expired," he stated. "Where the "B" has been bid and other issuers provided indications the market is attractive," he added. The existing "B" has always been over par, he said and has been bid in the 101-102 range. Pricing on the new $600 million "B" is LIBOR plus 2 1/4%, while on the old loan it is LIBOR plus 2 3/4%.

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 is also 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. Bank of America leads the bank facilities, but Small declined to say which bank would lead the new five-year revolver. Lehman Brothers is managing the note sale and according to one banker, is arranging a club-style syndication for the revolver.

The recently syndicated deals for Metro Goldwyn-Mayer-Studios and TriMas have broken in the last two weeks and broke and the paper has been scooped up by hungry investors. Both names have been trading in the 101 territory, according to dealers. MGM, which broke this week, was reported to have traded more than 10 times by Tuesday afternoon. Market players explained that prices for decent credits have been driven up as paper starved investors look to fill their baskets.

Five-year credit-default protection on French telecom giant Alcatel widened roughly 30 basis points last week in thin trading, in what traders described as a defensive tone to the market. The company's default swaps widened to 455-505bps Wednesday in London, after a long holiday weekend. One trader attributed the widening to broader negative sentiment from the previous week and the fact that London trading is likely to be thin for the entire week given the Jubilee celebrations and the much-anticipated World Cup match between England and Argentina. "Everyone's just being a little defensive," he noted.

Sydney-based Tyndall Australia may start purchasing and selling default swaps for its AUD3.5 billion (USD1.9 billion) fixed-income portfolio. "It's something I'm considering," said Roger Bridges, fixed-interest portfolio manager in Sydney, noting that he is studying the product and is speaking to a number of banks. Bridges continued that the fund manager is still in the initial stage and will take some time before it would look to become a user, as it will first need to establish systems as well as receive internal approval. Bridges declined to speculate on a timeframe on when the fund manager will start trading.

Loïc Fery, Asian head of credit derivatives at Crédit Agricole Indosuez in Hong Kong, relocated to London at the end of last month to assume a new role as co-head of global credit structuring. Fery said in this new position he will structure and promote synthetic credit transactions, including collateralized debt obligations, for the European market. He will continue to manage the Asian credit derivatives operation and will look to expand the business into Japan this year. Both Fery and Benjamin Jacquard, co-head of global credit structuring, who is based in Paris, report to Jean-Michel Beacco, global head of credit in Paris, according to Fery.

Sydney-based fund manager Hedge Funds of Australia, with AUD75 million (USD41.7 million) under management, is considering launching an onshore hedge fund next year that will look to use over-the-counter derivatives. "It's still the early days," said Spencer Young, managing director, noting that HFA is still in the planning stages. However, the firm is considering bringing an in-house managed fund to Australian investors. Young continued that such a fund would likely use OTC products, such as equity derivatives, but noted that it was too early to comment about specific products or strategies it would employ. A tentatively scheduled start date is the first quarter of 2003, noted Young.

Colonial First State Investments, the fund management arm of Commonwealth Bank of Australia, is looking to write credit-default swap protection on global names for its AUD1.2 billion (USD689 million) diversified credit fund. "It's an access and pricing issue," said Tony Adams, senior portfolio manager of credit funds in Sydney. "We'll use default swaps when they're cheaper than the physicals," he added.

Credit Suisse First Boston has hired Rick Selvala, an equity derivatives marketer from UBS Warburg, to sell over-the-counter products to retail and corporate clients, according to Michael Crooks, managing director and head of hedging and monetization at CSFB in New York. Selvala started at CSFB a couple of weeks ago. "This is a way to bolster our sales force," Crooks said, adding the hire is an indirect replacement for Amy Yamamoto, an equity derivatives marketer who resigned from CSFB earlier this year (DW, 3/2). Crooks said CSFB will make new hires on an opportunistic basis, declining to be more specific.

Deutsche Bank is growing its fixed-income derivatives marketing team as it expands into the mortgage and agency cash markets. The bank has hired Stephen Rye as an agency derivatives marketer in New York from Morgan Stanley, and plans to announce more hires soon, according to a spokesman. Rye will report to Tim Dowling, co-head of capital markets in the Americas. Dowling handles the derivatives portion of capital markets, the spokesman explained. Dowling referred calls to the spokesman and Rye was unavailable for comment.