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Bankers and analysts disagreed unanimously with comments made by former Enron ceoJeffrey Skilling last week. Skilling apportioned blame to the banks on the collapse of the energy company, and suggesting material adverse change clauses in loans should be prohibited for federally insured banks. Skilling, in front of a senate panel, said the company would have survived had many banks not invoked the MAC clauses in loan agreements.

The Official Committee Of Unsecured Creditors of Enron is trying to put the kibosh on a request by former Enron employees seeking the balance of severance packages not yet collected after the company filed for bankruptcy. The committee, which includes J.P Morgan, Citigroup, Bank of New York and Credit Suisse First Boston, claim the former employees of Enron are no longer entitled to their severance packages in response to a request for compensation made on behalf of the former employees by the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) on Feb. 14. Luc DesPins, counselor for the credit committee, did not return calls by press time.

Credit Suisse First Boston priced liabilities to fund Barclays Capital Asset Management's latest effort in the collateralized loan obligation market. The asset manager's latest $300 million CLO, Venture CLO 2002, is comprised of 90% senior secured leveraged loans and 10% high yield bonds and marketing of the notes was scheduled for the first week of February (LMW 2/4). The deal is now reportedly ready to close. Officials at Barclays did not return calls by press time. The Standard & Poor's $237 million triple-A rated tranche is priced at LIBOR plus 46 basis points; the $20 million single-A rated tranche is priced at LIBOR plus 155 basis points; the $13.25 million triple-B rated tranche priced at LIBOR plus 270 basis points. The investor on the remaining equity portion could not be determined by press time.

Bear Stearns has laid off at least nine analysts in its U.S. high-grade and high-yield research groups recently, according to firm officials. The layoffs come on the heels of reductions in European credit research (BW, 1/7).

ABN Amro is creating a London-based dedicated collateralized debt obligation group, and is looking to set up a commercial mortgage-backed group in New York, says John Mullen, global head of ABS. The firm is also looking to hire a new head of CDOs in London, a position that has been vacant since Mark Moffat joined Bear Stearns last year, he says. The new CDO group, which will be staffed by internal and external hires, is a response to the increased business in the European CDO market. As for the CMBS group, Mullen says the firm plans to hire a total of eight to 10 traders, salesmen, originator to the New York office as it ramps up its U.S. business to include large loans and floating rate loans. Mullen joined ABN last month from J.P. Morgan in New York, where he was a managing director in the investment banking division. He will relocate to London.

Mariner Post-Acute Network is seeking to arrange exit financing in preparation for leaving bankruptcy protection within the next two months while rivals Sun Healthcare Group and Integrated Health Systems are also said to be planning emergence. Mariner is in talks with several banks for a $50-100 million revolver and a $200 million "B" term loan, said Michael Gries, a partner at restructuring firm Conway, Del Genio, Gries & Co. and chief restructuring officer at the long-term healthcare company. The debt is expected to carry a spread of between LIBOR plus 3% to 31/ 2% with a tenor of six years. Mariner has also solicited bids from several investment banks regarding a note issuance. Gries declined to name the prospective bidders.

Stanley O'Neal, Merrill Lynch's president and coo, is recruiting Jack Mann to co-head leveraged finance and revive its struggling high-yield operation. Mann is currently manager of a leveraged buyout fund for the Carlyle Group. "No ink has been signed yet, but it's just a matter of paperwork," says one senior fixed-income official close to the situation. "I'm surprised they haven't named him already," says another official who spoke to Mann some 10 days ago. He speculates that the delay may suggest that Mann has had second thoughts about running the group, which has been subject to severe cutbacks and the departure of several senior executives (BW, 12/16, 2/11). Mann did not return several calls.

Merrill Lynch is recruiting Jack Mann to co-head leveraged finance and revive its high-yield operation according to LMW sister publication BondWeek. Mann is currently manager of a leveraged buyout fund for the Carlyle Group. "No ink has been signed yet, but it's just a matter of paperwork," says one fixed-income official familiar with the situation. "I'm surprised they haven't named him already," says another official who spoke to Mann some 10 days ago. He speculates that the delay may suggest that Mann has had second thoughts about running the group, which has been subject to severe cutbacks and the departure of several senior executives (BW, 12/16/01, 2/11). Mann did not return several calls.

A new Financial Accounting Standards Board proposal to increase the minimum required equity in special purpose entities (SPEs) held by third-party investors may slow the expansion of collateralized debt obligations market, according to BondWeek, an LMW sister publication. In a board meeting last Wednesday, FASB proposed an increase in the minimum required equity from 3% to 10%. The equity is the non-rated, highest yielding and riskiest tranche of the notes in a CDO deal, and typically the toughest to fill.

Laboratory Corp. of America gained cheaper pricing on the company's new $300 million Credit Suisse First Boston-led credit after Standard & Poor's upgraded the company from BBB to BBB+ in January. Pamela Sherry, v.p. of investor relations at the Burlington, N.C.-based company, said the facility fee and spread on the new loans are tied to the company's senior credit rating. Spreads on both the $200 million, three-year revolver and the $100 million, 364-day facility are LIBOR plus 1% with facility fees of 12.5 basis points and 17.5 basis points, respectively. "The upgrade is based off an increased recognition of diagnostic testing in health care," Sherry stated, explaining the growing importance of the field within health care. The sub-sector carries a higher profile, she clarified. "Only 3-4% of health care spending is in diagnostics, but this helps drive 80% of medical decisions," she added. Sherry declined comment on savings resulting from the upgrade.

Qwest Communications International is seeking to negotiate a new longer-term credit line with J.P. Morgan and Bank of America to replace the cp backstop line unexpectedly drawn two weeks ago. Joseph Nacchio, ceo, acknowledged in a conference call to analysts last Friday that the banks want higher interest spreads than they currently offer to Qwest and Robin Szeliga, cfo, added, "They need to earn an appropriate rate of return on their assets." The current $4 billion backup line is priced at LIBOR plus 11/ 8% according to Capital DATA Loanware. Qwest met with lead lenders last week after conducting a series of one-on-one meetings with the syndicate.