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Flowserve has tapped Bank of America and Credit Suisse First Boston to lead an upcoming acquisition financing deal after landing the Flow Control Division of Invensys for $535 million last week. "Flowserve was involved in an auction for the division last August, but pulled out after Invensys would not accept the bid," noted spokesman Sean Clancey. "We were very firm on valuations. In December Tyco International pulled back from their proposed bid and our chairman [Scott Greer] got a call to re-enter negotiations in late January," he added. Clancey declined to say how much debt would be involved in the acquisition, but said the company will have no higher overall leverage after closing than the current level, as measured by debt to EBITDA. Equity as well as debt will be used to finance the deal which is expected to close within two months, he noted.

Four Corners Capital Management, a new shop run by some familiar names, has entered the market with its debut collateralized loan obligation since the fund's inception in September 2001. Market sources said the firm is ramping up a roughly $400 million deal that will be a cash flow arbitrage structure with leveraged loans as the majority of the collateral on the deal. Michael McAdams, who left ING Capital Advisors to head up the new fund, was unavailable for comment as he was said to be shopping the deal in New York.

Three members of an eight-person team overseeing the $1.8 billion high-yield portfolio of Seneca Capital Management, a San Francisco-based money manager with $14.9 billion in total assets, have resigned. High-yield officials close to the three say they were upset because they felt Gail Seneca, the firm's ceo and cio, was meddling in their investment decisions, causing their performance numbers to slide. Seneca's high-yield team has beaten its benchmark, the Lehman Brothers high-yield index, in every year since 1997, according to gross performance figures posted on the firm's Web site. However, the team underperformed its benchmark in the fourth quarter of last year. First quarter performance figures were not available, and Gail Seneca declined to provide them. Seneca would not comment on why the trio chose to leave, and says she has "no way of calibrating" how much she is involved with the high-yield group.

Three members of an eight-person team overseeing the $1.8 billion high-yield portfolio of Seneca Capital Management, a San Francisco-based money manager with $14.9 billion in total assets, have resigned. High-yield officials close to the three say they were upset because they felt Gail Seneca, the firm's ceo and cio, was meddling in their investment decisions, causing their performance numbers to slide. Seneca's high-yield team has beaten its benchmark, the Lehman Brothers high-yield index, in every year since 1997, according to gross performance figures posted on the firm's Web site. However, the team underperformed its benchmark in the fourth quarter of last year. First quarter performance figures were not available, and Gail Seneca declined to provide them. Seneca would not comment on why the trio chose to leave, and says she has "no way of calibrating" how much she is involved with the high-yield group.

Trading was light in the high-yield market during the holiday-shortened week. Traders expect up to $2 billion in new supply next week, which may have softened bidding in certain sectors, such as chemicals. Here was some notable action:

Hughes Electronics' $600 million add-on has been well received with $20-30 million trading at par to 100 3/8 since the paper broke into the secondary market two weeks ago. One dealer said the paper is believed to have traded as high as 100 1/2. Market players said the name was trading among its original bank group as buyers who were pared back on allocation look to fulfill their original hunger for the name.

About $50 million of Owens-Illinois' revolver moved from dealers to institutions at 97 1/8-97 3/8 up from the 96 1/2-97 1/2 range over the last week on speculation that the company will carve out roughly $500 million of its revolver for a term loan to make the paper more attractive to institutional buyers. This change is expected to come through as an amendment or restatement rather than a refinance and it is expected to occur this month, after the company's first quarter. The move is designed to redistribute exposure to the company by moving paper out of the hands of pro rata lenders and into those of hungry institutional investors without syndicating a restructured deal. The banks holding a lot of the paper are encouraging this move to make the name more liquid in the secondary market.

High-yield portfolio managers and a sell-side investment-grade analyst are divided in their views regarding the bonds of telecommunications equipment maker Solectron Corporation, and one of its chief customers, Nortel Networks.

Adelphia Communications' Century Cable bank debt took a hit last Wednesday falling from the 99 range to 98 1/4 98 3/4 after its earnings release disclosed more than $2 billion in debt under the company's "managed entities." Dealers moved roughly $20 million of the paper.

Credit Suisse First Boston is looking to beef up its presence as a structurer of high-yield credit derivatives. Joe Russell, global head of leveraged finance trading, says the firm will look to add two senior traders and possibly a structurer, though it has yet to be determined whether CSFB will move people internally or hire from outside. Russell says credit derivatives, traditionally associated with investment-grade credits, have increasingly begun to trade on high-yield and bank loan desks. Russell attributes the increased popularity to the increasingly volatile credit environment of the last 12-18 months. He would not disclose specific clients who have demanded credit derivatives, though he says the product is particularly popular with hedge funds.

Deerfield Capital Management is planning a second quarter launch for its newest collateralized loan obligation, Bryn Mawr. The $300 million structure has not been officially warehousing assets yet, but will look to do so next month, said Jonathan Trutter, portfolio manager at Deerfield. The deal will comprise 100% leveraged loans that are mostly par names with Bank of America underwriting the liabilities (LMW 2/18). A reverse inquiry from a past equity investor prompted the deal.

More than $10 million of Exide Technologies' debt traded down to the 62-64 range last week from 66 earlier last month as the expiration of the company's covenant waivers approaches. The company has waivers on its financial covenants until April 12 and traders believe the company might opt to file for bankruptcy protection.