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An estimated $20 million of Xerox's bank debt reportedly traded early last week around 81-83. Also, early last week, Standard & Poor's downgraded the commercial paper to BB from BBB- on increased market uncertainty. While the S&P rating noted the company's strides in reducing debt by selling assets and getting vendor financing, the downturn in the economy could limit Xerox's growth projections. In a conference call last Tuesday, the company said the Sept. 11 attacks had caused an unprecedented loss in the company's business. As the rating notes, economic weakness reduced prospects for significant improvement. One market player spoke optimistically about the company's strategy, even in light of the latest forecast. "They're doing everything they're supposed to do from vendor financing to cutting costs. They got themselves out of the hole," he said. "The only thing against them is that the economy is weak." Calls to Barry Romeril, cfo, were referred to spokeswoman Christa Carone, who declined to comment.

Over 100 European bankers, analysts and company officials gathered in Rome last week for the Second Annual Issuers' and Investors' Summit on Italian & Southern European ABS. They spoke about investor appetite for securitizations, market growth and obstacles, pending legislation, repackaged finance deals and the different kinds of assets available for securitization. BondWeek Senior Reporter Rachel Wolcottfiled the following stories:

Vertical Crossings has hired Ken Clisham to be a senior relationship manager for its institutional structured product accounts. Patrick Downes, the New York firm's president, says Clisham, who joined several weeks ago, will be a managing director, and is in a new slot. He is a mortgage-backed securities market veteran, who had been a senior pass-through trader at Merrill Lynch, Greenwich Capital Markets and Chase Securities, and had worked with Downes at GCM, when Downes was head of that firm's collateralized mortgage obligation sales effort in the late 90s.

Lehman Brothers $100 million asset-based loan for Q Services, which was launched two weeks ago, by last Wednesday, had landed $25 million in commitments beyond the Lehman commitment. Further commitment levels could not be ascertained. Q Services helps maintain and enhance the production of oil and natural gas wells, an attractive sector right now, said a banker following the deal. In addition, the asset-based facility plays well to the market. Pricing is at LIBOR plus 4 1/2 % for the credit, consisting of an $80 million term loan and a $20 million revolver. The credit refinances existing debt. Calls to officials at Q Services were not returned.

The Loans Syndications and Trading Association has published procedures for credit agreement modifications to establish market standards for syndicated credit agreements, just as a flurry of activity in this area occupies the market. "The procedures are designed to guide the market and are not legally binding, but the market can have a standard to follow," explained Jane Summers, general counsel for the LSTA. The plan is to give the procedures a couple of months and then revisit in the first quarter of 2002.

Briggs & Stratton is set to close a $300 million revolving credit facility at the end of the month, adjusting pricing to current market standards in an effort to maintain its relationship with its lead lender. Due to its longstanding relationship with lead lender, Bank of America, the company knew pricing was a concern. "[Pricing] had been a topic of discussion for some time, but the [refinancing] was done on the company's incentive," said Jim Brenn, cfo of Briggs & Stratton. The existing deal was set to expire in April 2002. He says the existing deal was too small for the manufacturer of engines for outdoor equipment. "We wanted to guarantee liquidity," he said. "[The existing $250 million deal] felt snug in year four. It served us well for the first two years." Last year the company took out a $140 million, 364-day revolver to carry it through, but Brenn said that has run out as well. The new financing will be a three-year revolver, instead of the prior five-year maturity.

Amroc Investments, the distressed debt broker that was set to close last month, is still operating in a market confused about whether the firm ever ceased operations. Around Labor Day, Amroc Founder Marc Lasry said he had made the "bittersweet and gut-wrenching" decision to close Amroc so he could focus on his other business, Avenue Asset Management. But in the last few weeks, dealers started receiving axe sheets from Amroc and some said they received a message from Amroc saying "customers couldn't let us go."

Ares Management issued liabilities on a new roughly $400 million collateralized loan obligation two weeks ago and is in the process of closing its deal. David Sachs, official at Ares, confirmed issuance of the debt and said a favorable arbitrage in the market triggered the manager's timing on the deal. Sachs said Goldman Sachs is lead underwriter on the deal. Co-leads on the vehicle include J.P. Morgan, Deutsche Bank, and Salomon Smith Barney. He referred all other questions to Andrew Phelps, associate at the CDO syndications desk of Goldman Sachs, who did not return calls.

Barclays Capital has hired Gerard O'Connor, an analyst and collateralized debt obligation veteran, as a director for its new CDO department, according to Eileen Murphy, head of the firm's global CDO effort. O'Connor, who started last Monday, is in a new slot. He is acting as a structurer for all CDO products. Murphy says she is currently looking to staff four additional positions--two of which will be filled internally and two with external hires. All four spots will have a strong emphasis on equity distribution. O'Connor says he is "thrilled," to continue his long professional relationship with Murphy, as well as the opportunity to start a group from scratch at Barclays.

Anthony Faillace and Steven Luttrell, two veterans of BlackRock Financial Management, will launch Drake Management, a new fixed-income hedge fund based in New York. It will launch with $150 million in assets under management, according to Luttrell. Faillace, who was a non-dollar portfolio manager at BlackRock for three years, will be cio, while Luttrell, who was a senior executive in the alternative investment group, will be coo. Prior to their stint at BlackRock, they both worked at PIMCO. Luttrell says the firm will use a multi-sector, low volatility, relative-value approach to investing, and has no target on the amount of capital they want under management.

Credit Suisse First Boston launched syndication last week of its $1 billion credit for NorthWestern, backing the planned acquisition of Montana Power's transmission and distribution business for $1.1 billion. Pricing on both the $400 million, 364-day revolver and $600 million, 364-day acquisition facility is LIBOR plus 11/ 4%, based on a grid, with a 20 basis points commitment fee. Spokesman, Roger Scrum of NorthWestern confirmed CSFB was arranging the revolver facilities, but was unable to answer further questions, as the acquisition has still not yet closed and Kipp Orme, v.p. of finance and cfo at Northwestern, was in New York. Asked when the acquisition is set to close, Scrum responded, " It's in the hands of the regulators." There is no set time for the deal to be approved.