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The term loan "B" for embattled power generator Calpine seems to have found its clearing price, with bankers saying over $400 million of the $600 million has now been raised, but at a steep cost. A discount of 1% has been thrown in to sweeten the deal, in addition to a 1% price hike from the originally floated LIBOR plus 2 3/4 % spread, bankers said. In addition to the price hike, a dispute with the Californian utility board has been resolved, some added collateral has been thrown in and an equity offering has been announced that will provide some added liquidity, said a banker. The retail launch of the "B" is now planned for early May, he added.

Denali Capital is in the market again this year, ramping up its second collateralized loan obligation including middle market credits. Market players said the fund is planning to pull off a summer execution of a $400 million deal for which it has been warehousing assets since March. The deal is supposed to include a sizeable basket of middle market loans, but an exact amount could not be determined. Officials at the fund declined to comment.

Deutsche Bank has retracted statements it made in a recent research report on WorldCom Inc. In an April 12 high-grade weekly research report, Deutsche Bank stated "we believe the company is either headed for bankruptcy or a merger." Only five days later, it came out with a high-grade daily report that reads, "our comments regarding WorldCom, Inc. appeared in error due to an editorial mistake. We regret any misunderstandings that this may have caused." The move has several members of the fixed-income community questioning whether the firm's research group is autonomous from its investment banking operations. Deutsche Bank has not acted as lead underwriter in any of the company's debt sales within the past several years.

Deutsche Bank has taken the lead slot alongside J.P. Morgan for a $3 billion five-year multi-currency revolver for Siemens after taking a backseat on the last credit led by J.P. Morgan. Lothar Schlichting, a spokesman for Deutsche Bank in Frankfurt, Germany, said, "we were surprised we did not lead it five years ago. Deutsche Bank has a very broad relationship with Siemens." Schlichting would not say what ancillary business is conducted with the massive global conglomerate. Pay-to-play is as much a theme in Europe as in the U.S. Recently, Deutsche Telekom lined up three underwriters for a bond deal where the underwriters, including Deutsche Bank, were the lead arrangers on a company loan.

Lisa Gaffney has resigned from Deutsche Bank where she was a managing director and high-yield consumer products analyst. She wants to spend more time with her children, according to a fixed-income analyst who spoke with her. Gaffney and Andy Van Houten, co-head of high-yield research at Deutsche Bank, did not return calls.

Tom Hopkins, a Goldman Sachs managing director working in technology investment banking, has joined Deutsche Bank's leveraged finance group. "Hopkins will be a managing director doing origination for non-investment grade companies," explained spokesman Ted Meyer. "We've been bringing on board good people selectively over the last few months, such as Chris Johnson, from Merrill Lynch," he added, explaining Deutsche Bank is ramping up in the leveraged finance area. Meyer said this year Deutsche Bank was second in high-yield bond underwriting globally and in the U.S., according to Thomson Financial Securities Data. Hopkins worked at Bear Stearns and Alex.Brown prior to Goldman, doing high-yield. He will report to Rich Byrne, global co-head of leveraged debt in his new role.

Deutsche Telekom will benefit from the scarcity of new telecom paper in the market when it prices its new E8 billion issue next month, say London-based analysts. Even though spreads on existing DT bonds widened five to 10 basis points when the roadshow was announced last week, the new issue is said to be in demand from investors and the company will not have to pay too much of a new issue premium. "DT will be one of the only big telecom issuers this year. I don't think they will have to offer a big premium to secondary spreads," says Jean-Yves Guibert, telecom analyst at BNP Paribas in London. "Deutsche Tel's ratings are around where they should have been 12 to18 months ago and I can't see supply coming from elsewhere. The premium will be small," says Tim Jagger, telecom analyst at the Royal Bank of Scotland.

Distressed debt players are buzzing about the possibility of large asset sales on collateralized loan obligations rated by Moody's Investors Service in 1997 and 1998, but many market players say it is a false alarm as the rating agency has worked with managers to incorporate more flexible outlines on indentures. In deals rated by Moody's in 1997 and 1998 there is a provision in most deals that calls for CLO managers to sell off defaulted securities after one year. That provision is designed to prevent a drag on the deal created by the lag between recoveries and note payments. New distressed debt funds are popping up with the expectation of scooping up defaulted credits cheap relative to credit quality, cashing in on good recovery levels. "Distressed shops can low ball them [CDO managers] when there's more inherent value," said one portfolio manager of the much talked about scenario.

Dresdner Kleinwort Wasserstein is looking to hire three asset-backed securities bankers for its New York office. Saad Zein, a director of credit derivatives structuring with Dresdner Kleinwort Wasserstein, says he is a couple of weeks away from making offers for the three ABS bankers. "I am not getting much sleep lately," concedes Zein, who in addition to his credit derivative duties also fills the role of North American securitization chief, left vacant after the recent departure of Jon Bottorff to HSBC (BW, 4/22).

Roughly $10 million of Enron is believed to have traded in the 11 3/4 range last Monday with the 8K stating that the company estimates it will write-down $14 billion in assets. One market player explained that the levels took more of a hit than expected because $8-10 billion of the write-off is expected from Enron North America, where investors had previously thought that most of the value was to be found.

First Commercial Bank is believed to be the seller in a $23 million auction ofFederal-Mogul at 69 last Wednesday as market players anticipate resolutions to the company's asbestos liabilities. The name traded as high as 66 before slinking back into the 62-63 range three weeks ago following reports that Carl Icahn and other bondholders struck a deal with asbestos claimants. It is still unknown exactly how the bank debt will be restructured as negotiations continue, but investors are looking for value in near-term resolutions, explained one dealer.

Seneca Capital Management has made six new senior hires to its fixed-income team and will make further additions over the next few weeks, according to Gail Seneca, the firm's ceo and cio. The hires come as four more senior members of the team resigned, bringing to seven the total number of resignations the group has seen in recent weeks.