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Denbury Resources recently added an additional $40 million to its existing $110 million revolving credit facility to fund the acquisition of C02 Assets. "We're seeing it as a strategic play that can give us control of the price and availability of CO2 at Little Creek Field," saidPhil Rykhoek, cfo of Denbury, a Texas-based oil company which focuses on Mississippi, Louisiana, and the U.S. Gulf Coast.

About $250 million of bank debt from companies wrestling with asbestos litigation traded last week as dealers banked on credit restructuring and a shorter litigation process. The bank debt of Owens Illinois' and Owens Corning last week jumped 10 points and nearly 20 points, respectively. About $50 million of Owens Illinois traded in the high 80s, and as much as $200 million of Owens Corning traded in ranges from 40 to 56. Dealers cited Bear Stearns as one of the biggest players in the two names, but traders there declined to comment. Officials at the companies did not comment by press time.

Bankers last week speculated that the agents on the $775 million Performance Materials credit might move money from the pro rata portion of the deal to the "B" tranche, which was devoured. Credit Suisse First Boston and Deutsche Bank are leading the deal supporting AEA Investors and DLJ Merchant Banking's leveraged buyout of Performance Material. The $410 million institutional blew out within a week, and bankers said given the general malaise in the pro rata market, an adjustment on the $365 million pro rata portion of the deal might be on order.

A $10 million piece of Allied Waste's "B/C" tranche traded at 99 1/4 last week, following a presentation company officials gave at Morgan Stanley Dean Witter's high-yield conference in Florida. "It's no coincidence that the conference ended Wednesday, and there were six trades on Friday," said a dealer who attended the conference. "The buyside funds were there and saw it." He added that company's continued popularity has helped nudge up levels. "It's just a popular name. Everybody wants it. Everybody has a core position. The [waste hauling] industry makes people nervous, but the company itself has a good story."

A $3 million piece of AMI Semiconductor traded at 100 1/2 - 3/4 as the company's reputation as a good credit continues to help levels. "They're just a well-run company with well-run management," said a dealer. Another trader commented that there tends to be "inherent risk in lending to a technology company." On a positive note, he added that the structure of the deal is good and leverage is low. AMI, based in Pocatello, Idaho, provides digital and mixed-signal application specific integrated circuits. Credit Suisse First Boston leads the $175 million deal, which was recently signed.

Has the Bear Stearns European credit research team gone out to breakfast? The head of the department, Phil Crate, says the group had "a mind blowing experience" that ended in the revamping of the look of its morning briefing, as well as getting a chance to poke fun at the team's new U.S. paymasters. Their morning notes are now called the Bagel Bar, and feature a large cup of coffee and two bagels with the words 'credit' and 'news' on them, and can be found on investors' computers everywhere. The team recently switched from BNP Paribas. "I like the new look," says Esperanza Duncan, analyst at J.P. Morgan Asset Management in London. "But, the truth is I would have read it even if it didn't feature the food because I like their research."

BNP Paribas and Credit Suisse First Boston last week launched general syndication of a $1.25 billion loan for Sithe Energies, Inc. after raising roughly $1.2 billion in the primary round. Looking to bring down the allocations to the primary round lenders, the banks are looking for $50 million commitments at 75 basis points for top top-tier managing agent roles, $35 million commitments for co-manager slots at 65 basis points, and $25 million for participant slots paying 40 basis points. Credit Lyonnais is the documentation agent on the deal.

European telecom companies appear to be on the verge of issuing a new type of securitized debt backed by customer receivables, and this is making some market players edgy because the securities would carve out assets that unsecured bonds currently have first call on. The impact has yet to be felt on secondary prices because the deals haven't been finalized and many buysiders are unaware of them. "There has been no reaction in the bond market on the news because there hasn't been any news yet," says Tony Moverley, telecom analyst for Merrill Lynch in London.

FiberNet Telecom Group increased its existing $75 million credit facility to $105 million for working capital in conjunction with the company's expansion plan. Jon DeLuca, cfo, said the company went straight to its existing lenders. "[They] offered the most favorable terms," he said. No new covenants were added, although the date the facility expires was extended to six years rather than the previous four.

Lenders to the middle market are looking to form clubs on credits as the number of players in the market decreases and institutional buyers lose interest in the deals. Market sources predict that banks such as FleetBoston Financial, Heller Financial, and First Union, will have to increase the amount of deals they co-underwrite in order to combat a reduction in the number of banks playing in the market and a pullback by institutional buyers from deals they see as illiquid in the secondary market. With fewer buyers, lenders are looking to share exposure so they do not end up holding too much. Officials at FleetBoston Financial declined to comment. Officials at First Union did not return calls.

Market conditions are said to favor mainstay telecom names, with a number of trades reported last week and levels inching close to par. Nextel Communications' "D" paper traded up to 99 3/4 in a $5 million trade, while same-sized piece of VoiceStream Wireless' "B" tranche traded around 99. A dealer said that the "B" tranche was 99.50, while the "D" was bid at 99.625 and was bid stronger. "The institutional market is still flush with cash and the primary is not filling the appetite at the moment," he noted. "I would expect to see the on-the-run credits continue to perform well from a trading perspective."