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A unique amendment to XO Communications' bank debt agreement has essentially halted the trading of the name in the secondary bank loan market, thereby preventing financier Carl Icahn from buying the bank debt, according to market sources. The company's bank steering committee, which includes TD Securities, Bank of American, Barclays, J.P. Morgan, Deutsche Bank, FleetBoston Financial, and Scotia Capital, passed an amendment that, according to a statement in the company's most recent 8-K filing, requires majority senior lender consent to any transfers of senior secured debt, including both assignments and participation, for up to 90 days. "That would require the approval of the banks for an assignment," said one trader. "That's a little bizarre." Calls to Icahn's office were not returned.

Roughly $80 million of Comdisco bank debt was believed to have traded out of Morgan Stanley at the 82 3/8 - 83 level this week. Traders said the firm won an auction that occurred on June 14 and promptly placed the paper with an undisclosed buyer or buyers last week. Calls to Morgan Stanley were not returned by press time.

Trading levels for Kmart's bank debt fluctuated briefly earlier this, falling a couple of points on the fear that Martha Stewart would be implicated for insider trading on ImClone Systems. One dealer said more than $20 million changed hands by Tuesday, with the 364-day facility moving in the 73-74 range and the three-year facility moving in the 67-68 range. By Wednesday, levels had recovered and the name was said to be quiet. Calls to the company's spokesman were not returned by press time.

Levels on Lyondell Chemical's bank debt moved up this week after the company announced it would use $200 million of the proceeds from a $275 million offering of 10-year senior secured notes and an offering of seven million shares of common stock to pay down existing indebtedness under the company's term loans. Although the name was not changing hands, traders quoted the "E" term loan at 101 3/4 -102 1/2 , up from the 100 1/2 101 level two weeks ago. The loan has a call protection of 102.

Three leveraged credit facilities recently syndicated by Credit Suisse First Boston were oversubscribed this week, despite some investor grumbling over the opportunistic nature of the refinancings. Over the past couple of weeks, CSFB has been shopping a $255 million facility for Buffet's and a $530 million "E" term loan for Mueller. The firm also came to the market recently with a $600 million "C" term loan, jointly led by National City Bank, for OM Group. A CSFB banker declined to comment.

UBS Warburg has altered the structure of its deal for Herbalife International, backing the $685 million purchase by Whitney & Co. and Golden Gate Capital, upsizing the bond portion from $220 million to $250 million. The $165 million "B" term loan will be reduced $5 million, while $17 million of mezzanine financing will be shelved. A banker said a shortage of paper for the consumer products sector in Europe is spurring on the $100 million European bond piece. The U.S. piece will be $150 million. Pricing is expected to be in the 11-11 1/4% region.

Lyondell Chemical announced on Tuesday that it would use $200 million of the proceeds from an offering of $275 million, 10-year senior secured notes and a public offering of 7,000,000 shares of common stock to pay down existing indebtedness under the company's term loans. Traders said the name was not changing hands, but quoted the term loan "E" at 101 3/4 to 102 1/2 up from the 100 1/2 101 level two weeks ago. The term loan "E" has a call protection of 102. Doug Pike, company spokesman, could not be reached for comment.

International houses in Seoul, including BNP Paribas, JPMorgan and Standard Chartered Bank, have piled into the evolving exotic bond market in Korea, structuring range accrual notes for the first time, according to market officials. The notes, such as callable bonds, reduce funding costs for corporates and offer structures appealing to yield-hungry investors (DW, 4/28). Market officials noted that Korean investors have become interested in the structured products in recent months due to prevailing low interest rates.

The International Swaps and Derivatives Association is preparing to launch in the coming weeks a daily Hong Kong dollar interest-rate swap fix that would act as the benchmark for all derivatives transactions longer than one year. The move is expected to boost volumes and aid the development of more sophisticated interest-rate instruments, such as constant-maturity swaps and cash-settled swaptions. Angela Papesch, head of ISDA's Asia-Pacific office in Singapore, said, it is looking to go live around June 25. The association will conduct a daily poll of 16 firms to determine the floating rate they offer counterparties rated single A and above on swaps with maturities of one through five, seven, and 10 years, she explained.

WestLB is prepping its first two synthetic arbitrage CDOs, which it plans to begin marketing late this month or early next. The first of the two will be managed and the second will be static, according to Janet Tavakoli, executive director in credit derivatives in London. The deals are being driven by customer demand, she said.

Different regulation for securitized equity products throughout Europe has hindered the development of the sector and ensured a prominent role for the lawyers, according to Johan Grootheart, managing director and global head of structured product sales and origination at Deutsche Bankin London.