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A $5 million piece of Charter Communications' bank debt traded early last week at 99 1/4, which is down from 99 3/8 two weeks ago. Dealers say a $300 million add-on will pay down the revolver, but put new telecom paper in the market. "The more supply out there, the weaker the levels," said a dealer. The cable provider, based in St. Louis, Mo., serves more than six million subscribers throughout the country. Charter "B/C" paper was bid at 100 1/4 just last month (LMW, 2/21). Buyers and sellers could not be determined by press time.

Deutsche Bank is in the market with a $135 million, two-part deal for Leonard Green & Partners for buyouts of both Korea Times Los Angeles and International Media Group. Jonathan Seiffer, partner at Leonard Green, said the first part of the credit--a $60 million piece comprising a $10 million revolver and a $50 term loan "A" was underwritten by Deutsche Bank and will fund the acquisition of International Media Group.

Market sources said Dresser Equipment's $820 million credit--the largest LBO deal of the year so far--has more than $1.5 billion in commitments since its launch last week and UBS Warburg and GECC have come in on the deal as agents. Bankers said the strength of the deal has prompted the pro rata to do as well as the term loan "B" in what has been a tough pro rata market. Bankers said leads would no longer accept commitments on the term loan "B" piece of the credit this week.

Perry Beaumont, a longtime sell-side bond research pro who once ran Smith Barney's global fixed-income research effort, is opening a money management shop that will focus on "low-alpha" assets like Treasuries and agencies. East Hampton, N.Y.-based Beaumont, who just completed a two-year stretch as head of fixed-income research for the French insurance and financial holding company giant AXA, is confident that he can grow the asset base to the target level of $3 billion. He argues portfolio managers are going to be motivated to outsource low risk sectors, and focus on more complex sectors where returns are greater, like high-yield and MBS.

Many bankers were speculating on whether Deutsche Bank will be able to pull off its $400 million deal for FairPoint Communications as Nextel Partners announced it will not move forward with its $600 million add-on deal in light of what it sees as unfavorable pricing in an unfriendly telecom market. And as bankers see it, Fairpoint may suffer a similar fate. Officials at FairPoint did not return calls.

FleetBoston Financial's $200 million broadcast deal for Michigan-based Saga Communications came in oversubscribed at the end of the last week. Fleet acted as lead arranger and Bank of New York was syndication agent. Bank of Scotland, SunTrust, Union Bank of Caifornia, and Bank of Montreal are some of the other players on the nine-bank syndicate. It has not been determined whether the facility will be increased.

An auction for Integrated Health Services' bank debt resulted in a trade at 42 1/2 from 43 as dealers cited a softening bank debt market but noted health care is on its way up. Levels were quoted at 40-42 later in the week. The size of the piece could not be ascertained. "The bonds have come back down. People are just taking a breather right now," said a trader. "Distressed prices have run up, and people are just stepping back." In early March, Integrated Health was bid at 39 1/4.

All eyes are on Federal-Mogul's bank debt this week as the clock ticks on the company's opportunity to file for Chapter 11 bankruptcy. If the company does not file by March 31, the debt is expected to trade up about 10 points, according to some traders. Dealers last week were reportedly talking down levels in an effort to snag the paper. Levels on the "B" tranche were quoted in the 50-52 range.

Moody's Investors Service downgraded the $300 million unsecured revolving credit of Jo-Anne Stores, Inc. to B1 from Ba3. Moody's said the downgrade reflects revised expectations about Jo-Anne's ability to achieve previous profitability and leverage targets during 2001 and 2002. In addition, the Jo-Anne Etc. superstores have not performed to expectations. The ratings reflect Moody's belief that leverage and debt protection measures will not improve for the next 12-18 months and that profitability will remain challenged due to inventory rebalancing centered around the Etc. superstores. In the wake of the downgrade, the ratings outlook is stable as the company's management focuses on cash flow and conservative financial strategies in the face of disappointing operations. Moody's believes Jo-Ann's financial condition is unlikely to deteriorate further, although profitability and balance sheet measures are expected to change in the short-term.

Levels for Nextel Communications' bank debt fell two points after the company issued disappointing first quarter earnings, citing slowing business. The paper went to 98.50 on the "B/C" tracnhes and to 97 3/8 on the "D" paper, dealers said. "It was a pretty big surprise," said a trader. "They've performed well and are a stable credit." Yet Nextel is expected to ride out the rough spot. "All the dealers make their markets in Nextel," one observer pointed out. Another trader said the company is simply falling prey to a weakening sector. "Nextel is not the problem; it's across the board. At the end of the day it's as rock solid a credit as you can get," he said.

New York Life Investment Management is forming a lending unit designed to fund middle market leveraged buyouts, said Hugh Wade, senior managing director. Madison Capital Funding will have the full backing of NYLIM with transaction sizes ranging from $15 million to $200 million, according to Corporate Financing Week, an LMW sister publication. Wade said the unit is similar to that of Massachusetts Mutual's Antares Capital.

Bank Of New York, Bank of America, Commerzbank and HypoVereins Bank are looking for banks to round out the syndicate on a $500 million construction loan to Boston Properties. The 42-month loan funds the construction of the Boston real estate investment trust's second office tower in Times Square, a $640 million project.