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Harsco renewed a $131 million credit facility on Sept. 28 as a back-up to its commercial paper program. Robert Yocum, assistant treasurer, explained that the deal replaces a same-sized, 364-day deal. Pricing remained the same, but Yocum declined to reveal specifics. There were also no material changes to the covenants. Harsco is an industrial services and products provider.

Hayes Lemmerz' bank debt traded down to the 75 range, a six-point drop in a week, following a conference call by the company. According to sources, on Oct. 9 the paper was bid at 81. Then last Wednesday a class action lawsuit was filed against the company on charges that it made a series of misrepresentations to the market concerning its financial results for fiscal 2000 and the first quarter of fiscal 2001. The allegations center around charges that a reported net loss of $41.8 million for fiscal 2000 was understated by at least 31% and was actually $56.4 million for that fiscal period. Hayes Lemmerz, based in Northville, Mich., is a worldwide manufacturer of steel and aluminum products. Calls to William Shovers, cfo, were not returned.

Analysts on the buy- and sell-side are generally uneasy regarding the weakening economy's effect on non-depository financial companies, and while they are not betting on further spread widening, only Household Finance is being touted as a clear weakness play. Van Hesser, analyst at Credit Suisse First Boston, says bonds of Household Finance were cheap at last Monday's levels. The 6.75% notes of '11 (A2/A+) were bid at 172 basis points above comparable Treasuries, and 15-30 basis points behind big banks such as Bank of America, First Union, and U.S. Bancorp. He says Household bonds could close that gap by 10 basis points over the next three to six months. He says Household's spread levels reflect concerns of rising unemployment, but that the company's strong track record makes it a buy. A buy-side analyst at a large West Coast firm believes the bonds are fairly valued, however, arguing that 15-30 basis points is an appropriate discount in a weak economy for a financial name without depository assets.

High-yield wireline analysts say there are still opportunities to recover par at a substantial discount in the sector, even though a number of names have tested new lows in recent weeks. Anthony Klarman, analyst at Deutsche Banc Securities, recommends Allegiance Telecom (B3/B) because it is conservatively capitalized and should meet its goals and be EBITDA positive by next year. He declines to set target levels for the bonds. The 12.875% senior notes of '08 were marked at 55 last Tuesday. Alexi Coscoros, analyst at Bear Stearns, says he believes Allegiance paper is a good buy for medium-risk investors, though he favors Time Warner Telecom (B2/B-) because companies such as Allegiance that lease their equipment from larger carriers have yet to prove their business models. Coscoros says blue-chip investors can expect to recover par from Time Warner's bonds. He believes the 10.125% senior notes of '11 could trade up to 78 within a year: they were bid at 68 last Tuesday.

Tesoro Petroleum selected Lehman Brothers to both advise on its acquisition of some of BP's refineries, distribution and gasoline marketing operations and to provide Tesoro with financing for the deal amidst a turbulent market. Lehman restructured the acquisition financing in addition to having a LIBOR rate-floor incorporated into pricing on the bank debt to keep investors interested in the credit. David Chacon, director of investor relations, said the debt structure was altered in mid-syndication to increase the "B" term loan from $300 million to $450 million. And the company's bridge loan financing was downsized to $200 million from $350 million, providing a more balanced senior to junior-debt structure, he explained. The bridge loan facility is scheduled to be replaced with bonds next year. The LIBOR rate-floor was put in place at 3%, to assuage investor fears over lowering total returns due to a historically low LIBOR rate of 2.5% (LMW, 10/8).

Issuers are paying up to keep investors happy on acquisition term loans that have not been funded due to delays in deal closings. Buysiders said issuers have been offering generous "ticking" fees recently as a way to appease antsy investors in a tough market while they await funding on their allocations. Suiza Foods is offering investors 50 basis points as compensation for their patience, while International Multifoods has raised eyebrows with an unusually high 300 basis points fee--matching the spread on the loan. One market player suspects Multifoods may have credit issues unrelated to the acquisition explaining its hefty fee. John Byom, cfo at Multifoods, did not return repeated phone calls. Officials at CIBC World Markets, did not return calls about the increased fee.

Triad Hospitals' bank debt traded at 100 7/8 early last week with dealers attributing its resiliency to being a hospital credit. "It's defensive. If the world were to blow up, you'd still need it," a trader said. Triad has stayed in the 101 range since April, when it started to get a boost by resurgence in the healthcare industry. The Dallas-based company owns and operates 50 acute care hospitals and 14 ambulatory surgery centers primarily in small-sized cities in 17 countries. Calls to Burke Whitman, cfo, were referred to Pat Ball, v.p. of marketing, who declined to comment.

About $18.8 billion in new supply hit the market, with single A and up issuers dominating the calendar. Although high volatility and a downward bias in the equity market may have deterred some lower-rated companies from coming to market, there is nevertheless a sizable high yield calendar growing with visible supply of close to $2 billion. The highlight of the week was the Ford deal (figures not included in the charts because books hadn't closed as of Thursday evening), which showed that investors still had significant cash to put to work in the market. Although news of the deal initially pushed Ford spreads 15-20 bp wider, the bonds closed Thursday at Tuesday's post-downgrade levels. The market has clearly opened up for cyclical investment grade companies and those, like ILFC, directly affected by the 9/11 terrorist attacks.

Wyndham International's bank debt is starting to resurface, treading water in the 78-82 range last week. The increasing rate loan is in the 77-78 range, the revolver last traded in the 80 range, and the "B" paper traded in the 79-80 range. A dealer explained the levels have been supported by the company's recent announcement that occupancy rates have improved. Also, the distribution of funds from asset sales will be used to pay down a variety of debt, as opposed to simply paying down the revolver. "This gives benefit to everybody," he said. Wyndham has also recently secured covenant relief.

The CIBC World Markets and Citibank-led deal for CommScope is reportedly picking up interest after some sweeteners were added, but buyside reticence to invest in primary deals and some credit-specific issues are still making syndication a very tough job, investors said. Responding to investor demands for upside, CIBC and Citibank flexed up pricing 1% from LIBOR plus 3 1/2 % on the $225 million term loan "B", also being offered at a 2 1/2 % discount. Call protection of 103, 102, 101 is also being thrown in and the upfront fees have been bumped up for commitments of $20 million and $10 million. The upfront fee is now 1 1/4 % and 1% from 3/4 % and 1/2 % respectively. Calls to bankers at Citibank and CIBC were not returned.

Sponsors say banks are not lending, investors say sponsors are not willing to chip in more equity and banks stuck in the middle say the impasse between the two parties makes LBO deals a tough sell. Asked if the stalemate was slowing LBO deal flow, one investor joked, "It's hard to slow down a parked car."