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Source: www.bondweek.com

Congress Financial is said to be close to joining Bank of America's $200 million, three-year asset-based refinancing for Hyundai Motor America, the U.S. distributor of Hyundai automobiles and auto parts. GE Capital, CIT Group and Foothill Capital have already committed to the best-efforts credit, according to a banker familiar with the deal's syndication. The credit is secured by accounts receivable and inventory. Pricing is LIBOR plus 2% and is tied to a utilization-based grid. There is an unused fee of 1/4% at closing. The credit refinances an $85 billion secured revolver. Sales in 2001 reportedly were approximately $4 billion. Calls to officials at Congress Financial were not returned.

Huntsman Corp. and its operating subsidiary, Huntsman ICI, are the hot topics on most desks this week, with a combined $33 million of the names changing hands. A $23 million piece of Huntsman Corp. was auctioned off in the 76-77 range by one of its original lenders following a syndication meeting, traders said. Although it could not be determined what was discussed, the bank debt has risen up from the 68-73 range, where $10 million traded earlier this week. Huntsman ICI also traded up from the 96 level to the 96 3/4 - 97 3/4 range on rumors that a $200 million bond deal could take out part of the bank debt. Traders believe that $5-10 million changed hands over the week and that institutional investors are driving those trades. Calls to J. Kimo Esplin, senior v.p. and cfo of Huntsman, were not returned.

Credit Lyonnais, U.S. Bank and Citibank have joined on the refinancing for Arch Coal and Arch Western Resources at the co-documentation level. J.P. Morgan and PNC Bank are leading the deal and a banker familiar with the syndication said J.P. Morgan has committed $70 million and PNC bank $90 million. Documentation agents have committed $60 million each to the deal. An additional commitment has been received from Bank of New York. The $525 million "B" has already gained more than $100 million after launching on March 5, with Van Kampen and IDM among the buyers.

Buyout firm WL Ross & Co. is in talks with lenders for a $150 million bank loan to partially fund its $325 million bid for the steelmaking assets of bankrupt LTV. Wilbur Ross, head of the firm, said a decision on the bank would be made within a week based on the interest rate, business conditions and the ratios banks are willing to work with. He declined to name the banks in with a shot of funding the deal. The acquisition, which calls for $125 million in cash and the assumption of $200 million in environmental liabilities, is being funded with $80 million of equity, while LTV's financial adviser is The Blackstone Group.

Bear Stearns is preparing to market a synthetic collateralized debt obligation referenced to a USD500 million pool of bonds that will be both high-rated investment-grade credits and credits that are just above junk bond status. The deal is expected to come to market near the end of the second quarter, according to market officials. Such deals, including near-junk rated reference assets, are unusual because there is a dearth of liquid credit-default swaps referenced to low grade names. However, these structures likely will become more common because of a general deterioration in credit quality and in anticipation of proposed capital adequacy rules. Officials at Bear Stearns declined to comment.

BNP Paribas has started marketing hybrid synthetic collateralized debt obligations, such as CDOs of structured credit products, to clients in Japan and expects to issue its first deal in the coming months. "It's natural to have more structured products. The first stage was synthetic CDOs, the second stage is CDOs of CDOs," explained Go Yajima, senior structurer in Tokyo. "The market is getting used to new ideas."

BNP Paribas is planning to hire at least five foreign exchange marketers for its sales offices in San Francisco and Montreal. The move is an extension to its plan to hire about 20 marketers with knowledge of over-the-counter derivatives to offer more structured fx products in Paris, London and New York, according to an official at the firm (DW, 1/27). The firm has a team of four marketers in Montreal and five marketers in San Francisco.

BNP Paribas has boosted its focus on credit-default swap trading for European emerging markets with the hire of its first full-time trader. The move comes on the back of increased investor demand to buy and sell protection on high-yield and investment-grade names in the region, said Antione Chausson, head of credit structuring in London. Edouard Hervey, who previously was an emerging markets trader for cash and derivatives, has been moved and is now a dedicated synthetic default swap trader in London. Hervey referred queries to Chausson.

Six of Bank of America Securities' New York equity derivatives team resigned last week to set up a market-neutral multi-strategy hedge fund. The six plan to raise USD400-500 million for the fund and will use over-the-counter derivatives, according to market officials. The fund is hoping to secure seed capital from HBK, a hedge fund in Dallas, one of the officials added. A spokesman at HBK declined comment. The group will also hire additional researchers and quants for the hedge fund.

Credit-default swap spreads on U.K. television group Carlton Communications widened roughly 20 basis points Thursday after the company announced it would not merge with fellow British broadcaster Granada on Wednesday. Mid-market five-year protection on Carlton jumped to 270bps from about 250bps. "Carlton has spent an absolute fortune on [rights for] the Champions League but the merger would have helped spread the cost, plus advertising revenues keep falling," said one trader, explaining the jump in spreads. The Champions League is an annual European soccer competition.

Credit-default swap trading on Nippon Steel surged early last week after Japan Metals & Chemicals filed for court protection against creditors on Feb. 22. Nippon has an 8% stake in the company. Traders said that domestic corporates with exposure to Nippon Steel were behind the trades, which totaled around JPY7 billion (USD52.1 million notional) in five-year yen-denominated default swaps. In a typical week the average volume is JPY1-2 billion. The spread on five-year protection blew out to 120-135 basis points Wednesday from 105-115bps the week before.