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Bank of America is aggressively hiring for its London-based European fixed-income sales and trading efforts. Peter Plaut, head of European credit research, says the firm is looking to build its investment-grade and high-yield desks, but did not give a specific number of hires to be made. The firm has had a presence in the U.K. for two years and is looking to expand its headcount in response to business growth, he adds. Industry officials say B of A is also looking to ramp up its asset-backed securitization team. Calls to Arrington Mixon, head of European fixed income, and Steve Gandy, head of European ABS, were not returned.

CIBC World Markets' $500 million refinancing for Boyd Gaming, which will be launched into the market this month, is demonstrating the latest pricing trend in the loan market with the pro rata and "B" loan offering the same spread. A banker said the $100 million "B" loan and $400 million revolver are both priced at LIBOR plus 21/ 2%. Having the "B" spread the same as on the pro rata is being seen increasingly, said a banker, with some 15 deals so far this year following that form. Five "B" deals have set pricing below that of the pro rata, she said.

FPL Energy's long-awaited $2-2.5 billion construction revolver is in flux because co-lead arranger Citibank has reportedly declined to fully underwrite the credit. Fellow co-lead Bank of Nova Scotia is still working with the Juno, Fla.-based independent power producer, says a Scotia banker, declining further comment. A Citi official declined all comment and calls to FPL were not returned by press time, but project finance bankers say Citi is now effectively off the deal, according to Power Finance & Risk, an LMW sister publication.

Covanta Energy has received interim approval for its Deutsche Bank and Bank of America-led $290 million debtor-in-possession financing after its sports ventures and maturing debentures caused the company to file for Chapter 11 bankruptcy last month. The DIP facility is a 12-month facility including a $242 million tranche that incorporates existing letters of credit. The remaining $48 million tranche includes $34 million for cash withdrawals and $14 million for new letters of credit. Bob Shapard, company executive v.p. and cfo, declined to disclose pricing on the deal.

WorldCom excepted, the high-yield market was flat to slightly improved overall. Issuance continued to be solid, with two or -three European deals performing well (see story, page 1). Canadian telco Call-Net Enterprises' 10.625% notes were a big loser, dropping 20 points on poor numbers. Here was other selected action.

HSBC Securities has lost at least $45 million in its U.S. corporate bond desk trading operations, largely in telecom and Tyco International bonds, say fixed-income officials with knowledge of the situation. This hit, coming after a $15 million loss on the firm's U.S. Treasury desk and feeble bonus payouts for 2001, framed a dire picture for 2002 compensation and has prompted an exodus of senior staff of the corporate bond group over the past several weeks. There are just two people left on the capital markets origination desk, one of which is an associate. The decline in bonuses was particularly disappointing, say the officials, noting that expectations had been raised after the corporate desk turned an estimated $20 million profit in 2001.

Two portfolio managers are pointing to the shifting base of corporate bond investors, as well as the ancient Street practice of "pumping up the book" during deal pricing, to explain the recent ballooning spreads on new corporate issues.

Lehman Brothers allocated the $565 million "B" loan for Corrections Corporation of America last Tuesday, after upsizing the tranche and trimming the spread. The "B" was originally $495 million and priced at LIBOR plus 4%, but after massive oversubscription from investors, $70 million was added and pricing was slashed 1/2%. The "A" term loan was downsized $50 million from $125 million to $75 million, while the revolver stayed at $75 million. A banker said bids in the secondary are above par, but exact levels could not be confirmed. Pricing on the four-year pro rata is grid-based, also at LIBOR plus 31/ 2%. Deutsche Bank, UBS Warburg and Société Générale signed on for the pro rata, said the banker.

Kent Oz, head of financial institutional sales for BNP Paribas' equity derivatives group in New York, resigned last week, according to a firm official. Oz, who has been with the firm for more than five years, had been reporting to Vuk Bulajic, head of U.S. equity derivatives in New York. Bulajic resigned two weeks ago to join CDC IXIS Capital Markets North America as the head of equity derivatives sales and marketing (DW, 4/29).

Taking advantage of Korea's recovering credit story, Kumgang Korea Chemical (KCC) has opted to re-open its $100m 7.625% 2008 bond launched last year. The chemical, glass and paints manufacturer has appointed JP Morgan to arrange a $100m tap, with the issue likely to be priced early next week.

Two long awaited jumbo equity transactions from Malaysia are due to emerge in the coming weeks. The IPO of Malaysia's largest toll road operator is set to follow the float of one of the country's leading cellular telecom companies. The two deals should cement the return of Malaysia to the international equity markets.