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Calpine's "B" term loan is now in retail syndication with investors being offered a 1/4% upfront fee. Funds that committed before the retail round received a 11/ 2% discount, said a banker. The spread on the "B" is still LIBOR plus 33/ 4%, and even though the loan is now subscribed, the pricing is unlikely to be changed again, he added. The original terms were altered substantially after investors balked at the risk of lending to the embattled power generator, investors and bankers said. The originally floated LIBOR plus 23/ 4% spread was increased, some added collateral was thrown in and an equity offering has been announced that will provide some added liquidity, said a banker.

Cerberus Capital has snared a team of ex-Heller Financial pros to form Dymas Capital last week, and is gearing up to fill the void created by lender withdrawals for private equity middle-market deals. Explaining the timing and strategy of forming Dymas, Andy Marek, managing director, said, "There are not many cash-flow lenders serving the middle-market. There have been some new entrants but the foreign banks and domestic institutions have retrenched." The private equity firms are flush with cash right now and they need debt-capital, noted Al Ricchio, also a managing director at Dymas.

Credit Suisse Asset Management is ramping up a $350 million collateralized loan obligation that market players are saying is expected to be upsized a bit as the manager has been able to find additional collateral for the deal. The deal will comprise a majority of leveraged loan assets and a small percentage of high yield bonds--loans make up at least 70% of the deal, said sources. Officials at CSFB declined to comment. Ramp up on the deal began in February and after notes price and the warehoused assets are transferred to a special purpose vehicle, the dealer will continue with the final ramp up on the transaction which is expected to close in the next couple of months.

Geneva Steel, a Vineyard, Utah-based steel mill company operating under Chapter 11 proceedings, is seeking a new $250 million credit facility and is in talks with potential lenders. "The new loan will finance incremental investment in Geneva and refinance an existing loan," said Ken Johnsen, president and ceo. "We're talking to a lot of banks, and one bank is doing due diligence right now." He declined to name the banks or provide a timeframe for when a decision will be made. In addition to financing Geneva's turnaround strategy, the loan would repay a $110 million Citibank-led term loan. He declined to say whether Citi is in the running, what the pricing might be and what the pricing is on the existing line. Johnsen could not provide a date for exit from Chapter 11, but this will not be for some time.

One trader says nearly all of the trading last week was in five names: WorldCom, Tyco, Dynegy, Calpine and Adelphia. "If you didn't trade one of those names you could throw a line in the water and start fishing it was so slow," he added. Spread sensitive names backed up with Treasury yields, and telecommunications towers were weaker after poor numbers. Below is some of the action.

HSBC Securities lost the last senior member of its capital markets origination desk last week when Usman Ghani left the firm to join Bob Post, his former boss at Bear Stearns, in the financial institutions group of the capital markets division. He had been with HSBC over five years and declined comment on the reason for his departure. As of last Wednesday, the only remaining person on the HSBC origination desk was Hugo Moore, an associate, who is roughly two years out of college.

A buy-side and a sell-side analyst say investment-grade telecom and cable names are trading too far apart on a spread basis, given their overall similarities. Both analysts say the sectors have high fixed costs and high leverage. In addition, they say both industries are claiming growth that is difficult to discern due to M&A activity, and both face questions as to what extent consumers are really interested in their products.

Bids continue to rise for SpectraSite Holdings as market players speculate that the company and other tower names may choose to follow in the footsteps of competitor Pinnacle Holdings, which recently announced its prepackaged bankruptcy plan. The numbers are poor and the bids are getting firmer, one trader explained about tower companies. Dealers said that tower companies might look to clean up their balance sheets in such a manner that their bonds will get a haircut and the bank debt will be reinstated at par. SpectraSite, with its stock trading at 35-36 cents last week, could be a candidate for this type of restructuring.

J.P. Morgan is in the market with a debut $150 million institutional tranche for Trinity Industries, part of a $400 million redux on which bankers are divided, Texas-based Trinity, a maker of freight cars, box cars, gondola cars, and tank cars for hauling everything from lumber to corn syrup, is seen by some as cyclical and unattractive right now. Others said the "B" is already full. "Trinity is re-negotiating its credit lines," confirmed Jim Ivy, v.p. and cfo of Trinity. "We are cyclical, but also diversified," rejoined Ivy. "Our major business is in a major downcycle, but others are strong," he said. The company is seeking a $250 million three-year revolver and a $150 million term loan, he confirmed.

Lafarge North America, a supplier of building materials, has obtained a new $600 million credit facility replacing a $300 million, five-year revolver set to mature in December 2003 along with a $300 million, 364-day commercial paper backup line. The company needed to refinance its commercial paper back up line, so it decided to take the opportunity to secure the five-year revolver until 2007. "I know that I have a commitment for that amount of money for years into the future," said Kevin Grant, company treasurer, reflecting on the importance of the five-year line. "For cyclical companies that is important."

UBS Warburg is ready to launch syndication of the credit backing the leveraged buyout of Herbalife by private equity firms Whitney & Co. and Golden Gate Capital for $685 million. The senior secured bank debt will be in the region of $190 million, comprising a $165 million "B" loan and a $25 million revolver, said one buysider. This will leave senior leverage at a conservative 1.4/1.5 times, based on last year's EBITDA figure of $120 million, he noted. Total leverage will be closer to 3.5 times total, as a $220 million senior subordinated note offering is also planned, he added.

UBS Principal Finance, a proprietary fund owned by UBS Warburg, continues to add seasoned credit veterans to its lineup. The latest hires are Joe Mullally, formerly a senior emerging markets trader from Citicorp Financial, and Chris Melendes, former executive director and high-grade utility analyst at Morgan Stanley. Jim Switzer, head corporate bond trader at BNP Paribas, was also widely rumored to be joining the group, though he could not be reached. Mark Wisniewski, spokesman for BNP Paribas, would not confirm Switzer's reported move. Calls to Peter Abramenko, managing director and head of the credit team at UBS Principal Finance, were referred to Kris Kagel, a firm spokesman, who would not confirm any of the hires.