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The dust appears to have settled on Washington Group's debt, as the recent plummet of levels has reversed to a positive trend. Meanwhile, dealers note increasing comfort surrounding the company's financial issues and confidence that its core business--construction--is in demand and profitable. Dealers reported a series of small trades in the 82-83 context early last week. The Boise, Id.-based company is one of the country's largest construction and engineering firms. Calls to Washington Group were referred to a spokeswoman, who said the company plans to pull out of Chapter 11 in the fall.

Kansas City, Mo.-based American Italian Pasta switched from Deutsche Bank to Bank of America for a new $300 million, five-year revolver backing the acquisition of seven pasta brands from Borden Foods. Wendy Coffey, director of investor relations, said "B of A is the number one syndicator out there. Deutsche Bank is closer to number ten. We knew that B of A could get the job done and they did." A spokesman for Deutsche Bank rejoined, "in arranger league tables Deutsche Bank is between four and six placed on any given day and Bank of America is third."

The "B" paper for American Tower hit 99 1/4 in a $10 million trade last week, improving on the 98 3/4 bid on the name. Dealers have been divided on whether tower credits seem to tumble with the telecom sector. Some have said towers follow--albeit sometimes months behind--downgrades in levels on telecom credits. Still, overall tower credits have remained fairly resilient in a rocky market. Calls to the company were not returned.

Arch Wireless' bank debt continues to fall on sector problems, last week sliding to 23 from 26. Dealers reported a series of small trades last week. No buyers and sellers could be determined, but one trader said "a lot of desks have an axe in it." The paper plummeted 20 points in late July after the company announced it may default on its credit facility (LMW, 7/29). Dealers continue to note a sagging paging industry. "The pager is an item people can do without. With cell phones it's not really necessary," said a dealer.

BANK ONE has reportedly closed a $333 million balance sheet collateralized loan obligation--BOSS 2001-1-- last week. Bankers said the vehicle enables BANK ONE to move senior secured bank loans off its balance sheet, reducing the amount of allocated capital the bank needs to hold against the loans. A spokesman for the bank declined to comment on the transaction, but said, "it is consistent with what they have done in the past."

Barclays Capital is in the process of planning and structuring its first U.S.-based collateralized loan obligation, a cash flow deal with an asset base of at least $400 million in leveraged loans. Elliot Asarnow, global head of research and credit portfolio, said the bank hired Hans Christensen to start up a U.S. leveraged loan investment management business at the end of last month to start structuring the vehicle. Christensen was formerly a portfolio manager at Citigroup. "The first fund will come as an arbitrage cash flow CLO. If you're a manager focused on the U.S. leveraged loan market, that's been the vehicle of choice the last few years," he said.

Tower Holdings (Australia) helped cement the expanding high grade sector of Australian bonds when it launched only the second ever triple-B rated bond to firm investor interest last Friday. The $100m two year transaction was sole lead managed by National Australia Bank (NAB) and was priced at par, with a coupon of 69bp over BBSW. Tower Holdings (Australia) is the Australian arm of the New Zealand insurance company.

Ford Credit Australia Ltd is preparing to launch its second securitisation in Australia backed by auto loan receivables. The Australian arm of the US auto firm hopes to raise A$400m from investors in a four tranche deal through Ford Credit Receivables Trust 2001-1 (FCR Trust).

Swiss commodities group Glencore this week agreed a price range for its forthcoming A$2bn IPO. As reported two weeks ago in EuroWeek, the deal is priced attractively for fund managers and the public alike, featuring low multiples and a high yield. "With global markets in disarray, this is a great defensive stock," said one banker close to the deal. Credit Suisse First Boston and Deutsche Bank are arranging the transaction.

Australia Standard & Poor's has revised the outlook of the BBB+/A2 rating for chemicals and explosives manufacturer Orica to negative from stable. The agency said that the revision stemmed from an announcement of asset write-downs and a profit warning from Orica this week.

Oil Search shares plunged almost 8.5% after it sold new shares to investors in a placement through UBS Warburg and ABN Amro on Tuesday. The deal represented 15% of its outstanding shares and was at a deep discount to the market price at close on Monday. Oil Search is the largest holder of gas and oil reserves in Papua New Guinea. Oil Search said it raised A$90.9m by selling 86.5m shares at A$1.05 each, or 11% below yesterday's (Thursday) closing price. The company reported that the issue was oversubscribed with allocations to more than 40 institutions on four continents.

Japan Aiful Corp shares rose almost 7% on Tuesday after the Japanese consumer lender priced its new share offer. Successful completion removes some uncertainty surrounding Aiful's financial stability.