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Dade Behring, a producer of diagnostic goods and services, traded up to 99-100 last week from the 98 1/2 level two weeks ago upon speculation by traders that a restructuring plan is in the works. Traders said a restructuring plan had been released but declined to comment on its contents. Dealers speculate that collateralized loan obligation managers and other institutional players are among the buyers. Sellers could not be determined. "The company is continuing positive and productive negotiations with its banks, bondholders, and existing equity holders regarding restructuring debt, but no decision has been reached," said a Dade Behring spokesman. He declined to comment on bank debt trading levels.

Deerfield Capital Management is planning a second collateralized loan obligation for this year in the roughly $300 million range. Jonathan Trutter, portfolio manager, said the fund is structuring a new CLO that will be launched into the market during the second quarter. The fund will be in the market buying up par names to fill out the leveraged loan collateral on the traditional, cash-flow arbitrage deal.

Deutsche Bank is scrambling to provide leadership and restore flagging morale in its corporate bond research group. Charlie von Arentschildt, Deutsche Bank's head of global markets for the Americas, says the impetus for this effort were remarks byDavid Folkerts-Landau, the firm's London-based global head of markets research, critical of recently dismissed investment-grade research co-heads Paul Tice and Mark Girolamo (BW, 2/4). Folkerts-Landau declined comment through an assistant.

The Allstate Corporation will move its roughly $1 billion in high-yield assets back in-house and away from Trust Company of the West, a Los Angeles based money manager. "Primarily what we're trying to do is recruit and retain [asset management] talent as well as position ourselves to attract new institutional business," says Mike Trevino, spokesman for Allstate. He says the ability to offer high-yield products has been "one of the missing ingredients," in the drive to attract such business. The Allstate Corporation manages $750 million in third-party money through the Allstate Investment Management Company, a subsidiary. Trevino also notes that in a volatile credit environment that has seen a number of "fallen angels"--bonds that drop from investment-grade to high-yield--it helps to have high-yield expertise. The firm has announced a $25 million write-off resulting from losses related to Enron.

Aftermarket Technology Corp. is set to close on a new credit facility in tandem with an equity offering designed to increase liquidity in trading of the shares and rework its balance sheet. "ATC is in the process of regrouping the capital structure through a share offering and so the credit facility is being put in place at the same time," noted Mary Ryan, director of investor relations. "It's being done in one fell swoop," she said. ATC is offering 2.4 million shares, she said, a response to investor requests for increased liquidity in the company's shares. "The stock is very thinly traded." Proceeds from the equity offering will partially replace existing debt, Ryan added.

BANK ONE is preparing to launch syndication of a $400 million credit for Printpack, an Atlanta-based producer of flexible packaging. The deal is expected to hit the market by the end of the month. The facility will be used to redeem the 9 7/8 % notes due in 2004, the 10 5/8 % senior subordinated notes due in 2006 and replace the existing credit line, explained Trip Ceitter, treasurer. The existing line, a $188 million facility, was arranged by First National Bank of Chicago. Officials at BANK ONE did not return calls.

The $175 million "B" term loan led by BNP Paribas and Lehman Brothers for CSG Systems International blew out last week after launching on Feb. 6. A banker said the "B" tranche satisfies current market needs for large-sized deals within a defensive sector. The "B" is part of a $400 million secured facility backing the acquisition of the billing and customer care assets of Lucent Technologies, known as Kenan Systems (LMW, 1/28).

Kmart's bank debt popped up to 68 by the end of last week from 53 as the smoke has cleared regarding news that certain subsidiaries of the bankrupt retailer have guaranteed the company's bank debt. Dealers said $50 million of its $1.5 billion deal traded over the course of last week with a piece trading early in the week in the 64-66 range. "People think the name will clear 80," said one trader, noting that both banks and distressed funds are more interested in the name now that it is clear some of Kmart's subsidiaries will guarantee J.P. Morgan's loan to the parent company.

BNP Paribas is in the market with two synthetic lease facilities. A $235 million facility for Chiron, a global pharmaceuticals company, which will fund the construction of two new buildings in California, hit the market last Tuesday. And a $60 million synthetic lease for Specialty Laboratories was launched last Thursday.

Amid widespread volatility in the investment-grade telecommunications sector over the last three weeks, analysts Doug Colandrea at Morgan Stanley and Ed Oppedisano ofDeutsche Bank have found common ground by recommendingSprint and AT&T bonds. Oppedisano is recommending the AT&T 7.3% notes of '11 (A3/BBB+), as they include a step-up coupon compensating investors in the event of ratings downgrades. He also says the company has done a good job reducing debt on its balance sheet, and will return to 180-185 basis points over Treasuries if the overall economy improves. The bonds were trading at 235 basis points over 10-year Treasuries last Tuesday. Colandrea says earlier issues by AT&T are also attractive, as language in the proxy statement gives bondholders a veto over the company's pending cable sale to Comcast. He says bondholders are likely to receive a cash payment from the company in exchange for giving the deal the okay.

The Gap, hit hard by a combination of fashion faux pas' and the weak U.S. economy, was still able to receive $1.3 billion in commitments on a new two-year credit facility last week. The old facility led by Citigroup was maturing in June and some bankers suggested The Gap could be as out of favor with banks as the casual dress it supplies within them. "The stock price has run away from them and the retail environment is very tough right now," said one banker. The new line is expected to close in March, but pricing and the lead banks could not be ascertained. Calls to the treasurer, Sabrina Simmons, were referred to a Gap spokeswoman who declined comment on the refinancing and a Standard & Poor's report on the company, which placed them on credit watch negative. The senior secured bank loan is on BBB+.