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Morgan Stanley and Credit Suisse First Boston two weeks ago launched syndication of a refinancing deal for Graphic Packaging International. The $450 million bank deal consists of a $300 million, five-year revolver and a $150 million six-year "B" term loan. Pricing on the revolver is LIBOR plus 2% with a 1/2 % commitment fee, and LIBOR plus 3% on the institutional tranche. Golden, Colo.-based GPI is also offering $250 million in subordinated notes. The credit refinances a $325 million, five-year term loan and a $400 million revolver. Bank of America is the agent on the existing lines. Questions to CFO Luis Leon were referred to Paddy Broughton who declined to comment.

Nomura International is developing a fixed-income underwriting business in North America and is looking to hire a banker to fill the newly created position of head of North American debt capital markets. Stefano Ghersi, London-based global head of DCM and to whom the new hire will report, says previously Nomura only had an informal fixed-income underwriting effort in North America. Now, as part of its global fixed-income push, the region will play a key role in the firm's expansion plans, he said. The firm is looking to recruit a major player from a top firm to lead the effort.

Rogers Cable, a subsidiary of Toronto-based Rogers Communications, has closed on a new seven-year $1.075 billion credit line and upsized a $300 million note offering to $450 million, despite the parent company already having a heavy debt profile. Debt to EBITDA is now at four to one and the new $450 million note offering will prepay $300 million in notes due this year, said Eric Wright, manager of investor relations for Rogers. The credit line will also repay existing debt and fund capital expenditures, he added. Standard & Poor's believes the debt load to be heavy, driven by the capital-intensive nature of cable television systems, but the stable valuation of the systems offsets this. The senior secured loan is rated Baa3 and BBB-, said Wright.

Last week $40 million of Williams Communications traded following financial concerns surrounding the name. Traders said Bank of Montreal sold $20 million of the name. Other dealers could not be determined by press time. The debt is currently trading in the 60-63 range, down 10 points over this year.

Tesoro Petroleum will return to the bank market for financing to back the $945 million acquisition of the Golden Eagle refinery from Valero Energy. Tesoro will also purchase the value of inventory, estimated to be $130 million. Lehman Brothers is leading the financing, which will result in $375 million in term loans, a $70 million revolver, $450 million of subordinated debt and up to $250 million equity component. The financing will be done "as soon as possible," said a banker, unable to provide more precise timing. Bankers at Lehman did not return calls. A Tesoro spokeswoman confirmed Lehman is leading the deal, but declined further comment.

Market volatility dominated the week and put a damper on the new issue market with only $2.9 billion in new deals being priced. With investors focused on the volatility in Tyco, WorldCom, Household Finance and other benchmark corporate bond borrowers there was little appetite for BBB names or risky names. In fact, Computer associates (Baa1/BBB+) pulled a plan deal from the market when Moody's put the companies rating on watchlist for a downgrade. That said, there appears to be money to put to work for very high quality borrowers as shown by the $400 million 10-year deal for AA rated Kimberly-Clark, which was sold in less than an hour. Emerging markets had a rare debut borrower as Peru (Ba3/BB-) came to market with $1.43 billion 10-years priced at +455 basis points over Treasuries. About $500 million of the new deal was for cash and the rest was used for liability management to retire Brady bonds. The cash portion was significantly oversubscribed with a reported $1.7 billion in demand.

Market volatility dominated the week and put a damper on the new issue market with only $2.9 billion in new deals being priced. With investors focused on the volatility in Tyco, WorldCom, Household Finance and other benchmark corporate bond borrowers there was little appetite for BBB names or risky names. In fact, Computer associates (Baa1/BBB+) pulled a plan deal from the market when Moody's put the companies rating on watchlist for a downgrade. That said, there appears to be money to put to work for very high quality borrowers as shown by the $400 million 10-year deal for AA rated Kimberly-Clark, which was sold in less than an hour. Emerging markets had a rare debut borrower as Peru (Ba3/BB-) came to market with $1.43 billion 10-years priced at +455 basis points over Treasuries. About $500 million of the new deal was for cash and the rest was used for liability management to retire Brady bonds. The cash portion was significantly oversubscribed with a reported $1.7 billion in demand.

Allied Irish Bank's surprise announcement last week that a rogue foreign exchange trader had racked up $750 million in losses, has European bank analysts worried that spreads will widen dramatically throughout the sector. Just after the losses were announced, AIB's tier-one bonds widened by roughly 45 basis points to 200 basis points over German bunds. "There is a risk of contagion to firms closely associated with investment banking and with derivatives trading exposure," says Olivier Szwarcberg, a banking analyst at Bear Stearns in London. As of last Thursday however, only a few banks had been affected. Bonds of Standard Chartered widened out by 10 basis points, while Fortis Bank and Bank Of Ireland were trading up to 12 basis points wider at LIBOR plus 166 and 156 basis points, respectively.

Allied Holdings has received commitments for a $202 million revolving credit line to refinance its expiring credit facility and address its subordinated debt obligations set to mature in February 2003. "We wanted to put in place a facility that would allow us to refinance both the bank debt and the subordinated debt by using our subordinated collateral base to secure borrowing," said Dan Popky, senior v.p. finance and cfo for Allied. The credit will be led by Ableco Finance and Foothill Capital, covering $173.5 million of the line. The remaining $23.25 million will be provided by existing bondholders. Popky declined to comment on pricing on the deal, which is expected to close later this month.

Collateralized loan obligations comprised of middle-market loans from bank portfolios, a rare sight to date, could amount to billions of dollars this year as banks in the U.S. and abroad look to remove the balance-sheet risks through either synthetic or cash-flow structures. With the Bank for International Settlements increasing pressure on banks to understand credit, and many of the larger loans now off the balance sheet, bank credit officers are turning their attention to the middle-market loan portfolio, explained Jeremy Gluck, managing director at Moody's Investors Service. The big area for potential growth is banks securitizing their own middle-market loans, he stated, whereas in the past independent managers have been the active players.

Bank One Capital Markets is readying its first European structured investment dollar- and euro-denominated medium-term note programs as well as commercial paper programs in both currencies. Ultimately, the SIV will reach a capacity of $20 billion, says Jim Irvine, managing director and head of structured investment vehicles in London. The SIV, called White Pine, will manage its interest-rate and foreign exchange exposure through swaps. The swap counterparties have not yet been selected, but Irvine says they must be rated at least A- long-term or A1 short-term.