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J.P. Morgan Securities has lost another veteran CDO pro as Mario Verna left to join Deutsche Bank, according to a Deutsche Bank CDO executive. Deutsche Bank, which plans on beefing up its CDO group, according to this executive, has made Verna a director in its global credit products group. Verna's position was created because of the department's expansion, according to a Deutsche Bank source, and he is reporting to Marc Pfeffer, chief operating officer of the global credit products division, and will be based in New York, structuring CDOs. He has been in the structured products business seven years, including a stint at Fitch as a structured products analyst. At newly merged J.P. Morgan Chase, where he was v.p. with the CDO group, Verna reported to Romita Shetty, the head of the CDO group. Verna would not comment on his motivation for leaving, nor would he disclose his new compensation package. As of press time, Shetty was traveling in Europe and did not return a phone call seeking comment. Former CDO group executives at J.P. Morgan Securities point to a string of recent defections to rivals, including Verna, John Clements (BW, 4/9) and several unspecified others, as proof of the difficulty in merging the two high-profile CDO operations.

There were a number of small trades of Nextel Communications' bank debt last week, with levels finally settling in the 95 range. "It had been moving up. These names tend to stay stable or trend upward, drop down, then slowly creep their way back up," a dealer explained, adding that the credit's massive size has helped it stay ahead of the hit to the telecommunications sector. "It's just so big and so liquid, it tends to be the bellwether of the industry. Everyone who's anyone is in Nextel," he noted.

The pro rata market is in the process of a major restructuring as banks examine the lack of return associated with the business and the increasing difficulty in finding players to share the burden of large credits, syndication pros said in a panel discussion last week. Bankers said those changes are affecting the way deals are structured and posting a red light for certain borrowers.

Bank of America is seeking commitments from institutional investors for a $95 million term loan "D" for San Antonio-based, Kinetic Concepts, Inc. Lulu Olson, treasurer, said the bank meeting was held May 9 and that the closing of the deal is anticipated in the first week of June. Pricing is LIBOR plus 31/ 8% for the five-year loan. Deutsche Bank is syndication agent and B of A is lead and administration agent. Fremont Partners, the San Francisco-based investment firm, is primary sponsor for the deal.

European high-yield investors are saying the popularity of Europe's largest-ever junk bond says far more about the paucity of European non-telecom junk paper, than about the quality of the E550 million ($440 million) issue by Messer Griesheim (B2/B+). The first quarter saw European junk issuance round out at around $2 billion, against the $30 billion chalked up in the U.S. The investors express concern over the structural debt subordination, which, they say, puts them in a very precarious position in the event of default. There are also questions about information on the explanation of cost-cutting plans, the ability to raise funds via asset sales, and the quality of communication between top executives. Nonetheless, the bond was reportedly oversubscribed by E1.45 billion ($1.28 billion) and trading at E104.5 last week. A high yield syndicate official at Goldman Sachs, which underwrote the deal, declined comment.

Moody's Investors Service assigned a B1 rating to Hialeah, Fla.-based Telemundo Group Inc.'s new $500 million of senior secured bank facilities, citing the strength of its security interests and guarantees and improved programming performance. Christine Padgett, v.p., senior credit officer at Moody's, said the debt is secured against a valuable asset base, consisting of 10 full-power stations in the U.S. and Puerto Rico. These are a piece of the spectrum which Telemundo has the license to operate, she explained.

Moody's Investors Service downgraded IMC Global Inc.'s senior unsecured debt ratings to Ba2 from Ba1 and Moody's also withdrew the Ba3 rating on the company's existing $800 million credit facility.

Bank of America, Credit Suisse First Boston, Deutsche Bank, Goldman Sachs, and J.P. Morgan Chase have invested in a trading platform put forth by LoanX, Inc. The platform is expected to launch before year-end and will give buyers and sellers of syndicated loans electronic access to information about credits and the ability to execute trades electronically. "Loans are one of the most opaque products in the capital markets, so any development to shed additional light on it is appreciated," said Michael Zupon, managing director at Carlyle Group, in support of the new platform. Clay Desjardine, head of sales and trading at Deutsche Bank, said the main objective is to provide more liquidity and transparancy to the market. Michael Rushmore, ceo, also co-founded Creditex, Inc., an electronic platform for trading credit derivatives.

Lafayette, Louisiana-based PetroQuest Energy, Inc., an oil and gas exploration company, has amended and increased its $50 million credit facility to $100 million and has increased its bank group. Robert Brooksher, v.p., said that following a pre-determined borrowing-base exercise, PetroQuest decided to increase the bank group to enhance flexibility and meet exploration purposes as they arise. The amended facility, originally closed with Hibernia National Bank in September, now includes Royal Bank of Canada and Union Bank of California, added Brooksher. The banks were selected based on pricing, relationship and lending amount, he stated.

The 13-strong loan group at N.J.-based Summit Bancorp has been let go following the merger with FleetBoston Financial. One of the bankers who was let go said that the last day of April signaled the end of employment for the six primary, two par loan traders and back office support staff that comprised the team. "There was a degree of duplication in work, but primarily volumes in the loan market are down dramatically," said the source, declining to be named. Fleet, which closed its deal with Summit in March, has also reportedly let go about 20 people in the 80-strong loan department, he added, reflecting the state of the market. A Fleet spokesman could not provide comment by press time.

The "B" and "C" tranches of Goldman Sachs' jumbo credit for German industrial chemicals giant Messer Griesheim blew out last week in the U.S. with commitments of $800 million coming in, igniting expectation that pricing will change. The loan, split between the U.S. and Europe, could also see the "B" upsized due to the strong institutional fervor and to reduce the size of the European credit, said a banker familiar with the situation.