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Steven Jones, portfolio manager at St. Louis-based Missouri Valley Partners, says he will swap $20 million, or 20% of his portfolio, out of mortgage-backed securities and corporates if spreads on both credit products come in by 40 to 50 basis points, something he anticipates happening by year-end. He will invest the proceeds into Treasuries. The rationale is to take the Treasury allocation from its current underweight to market neutral.

Old Mutual Asset Management will consider buying Eon's next offering, if it comes at an attractive level. Richard Woolnough, the fund manager for the firm's £200 million corporate bond fund, he declined to say what that level would be. The firm recently re-entered the utilities sector buying RWE's last offering--a 6.375% of '13, which was priced at 105 basis points over gilts. "We had no exposure to utilities, because we knew new supply was coming, which was weighing on the sector. [The new issues] allow the fund to finesse its way back into the sector at attractive levels," says London-based Woolnough.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Approximately $15 million of Adelphia Communications' Century Cable bank debt traded in small pieces in the 91-92 range last week as investors fretted over a possible delisting of the company's stock from the Nasdaq exchange. It sunk further into the mid to high 80s by midday last Thursday as investors fear that the company may have skewed its subscriber numbers.

Collateralized debt obligation managers are having an increasingly difficult time getting allocations on new issue deals, making it more difficult to close on CDOs in the pipeline. Market players said there are several cash flow arbitrage CDOs trying to ramp up, but there is an expectation that deals will get stuck as there are not enough assets in the market to complete ramp up requirements. "It's tougher than first quarter to get allocations," explained Paul Carey, head of corporate banking at Allied Irish Bank and manager of a new arbitrage deal for the firm. Carey explained the bank is currently warehousing assets for a minimum $300 million deal with a target close by the end of the year. But the process is challenging as M&A activity is not robust enough to feed the leveraged loan market, explained Carey, and he expects the ramp up period to take several months. "Supply side deal flow is not significant and on the CDO side, there are a greater number waiting to invest," said Carey.

Banc One Capital Markets has hired two senior high-yield analysts from Chicago-based money managers to help build its high-yield business. Dana Johnson, Banc One's head of capital markets and foreign exchange research, says he chose to focus on sectors in which the firm already has banking relationships. The firm has been beefing up its overall fixed-income effort since last fall, and recently hired Bill Wulkan to the new position of London-based capital markets head (BW, 3/17).

Barclays Capital is building up its London-based European high-yield business and is planning to hire traders and salespeople. The move comes in response to an increase in "fallen angel" credits, cross-over names and distressed debt, especially in the cable and telecom sectors, says a Barclays insider. Most recently, the firm hired a senior high-yield trader, Steve James, who joined from Schroder Salomon Smith Barney in London. James declined to comment.

The Blackstone Group has hired a stable of analysts for its recently formed structured finance group, Blackstone Debt Advisors. The addition of the four credit analysts and two financial analysts follows the hiring of Dean Criares earlier this year from CIBC World Markets as Blackstone seeks to manage a series of collateralized loan obligations. "Blackstone has been intrigued by the corporate debt markets for the last five years, and we have now established a group looking to invest in the senior secured leveraged loan asset class," said Criares, a managing director at Blackstone. He declined comment on whether Blackstone is currently working on a CLO vehicle.

UBS Warburg and Bank of America are holding one-on-one meetings with investors in New York and Chicago to shop the $175 million credit for Blackstone Capital Partners backing the acquisition of a majority interest in The Columbia House Company. A banker said one-on-one meetings are better when a credit has a story and needs explanation. Columbia House is moving away from selling compact discs into DVDs and though there is good cash flow, the story is complex and the company does not have solid asset coverage, said the banker. Pricing is a high LIBOR plus 41/ 2% on the $145 million "B" loan and on the $30 million revolver, though total leverage is only about 2.8 times.

Keefe, Bruyette & Woods has hired Jacques de Saint Phalle to a senior position in the fixed-income group, according to several fixed-income officials familiar with the situation. He joins from Bear Stearns where he was a managing director and head of high-grade syndicate. The hire is part of Keefe, Bruyette's effort to rebuild its fixed-income operation after it was devastated by the Sept. 11 attacks. The firm recently hiredKevin Meenan and Jim Cahill, as co-heads of fixed income, and has made new research hires as well.

MMC Enterprise Risk, a subsidiary of Marsh & McLennan the international insurance broker, has hired Colin Lally, formerly a top securitization banker at Nomura Securities International in London, as a senior transactor. Lally will join MMC next month and report to Henry Cooke, head of European enterprise risk management transactions, and with whom he worked at Nomura. Cooke joined MMC last year. Cooke says MMC aims to use insurance capital as an alternative to bank capital for corporates seeking to transfer risk to the capital markets. This is a relatively new business for Marsh, adds Cooke. He reports to Jamshid Ehsani, who heads the business in New York. Ehsani did not return calls.

MedSource Technologies, a Minneapolis-based provider of engineering and manufacturing services to the medical-device industry, completed a debt overhaul through an initial public offering, slashing annual interest costs by 75%. MedSource had $86 million of debt, of which $66 million was senior and $20 million was subordinated debt, said Paul Scolardi, corporate controller. While completing an IPO, which paid down debt accumulated through acquisitions, MedSource also put in place the new facilities, he added. Interest expense has gone from about $10 million per year to $2.5 million.