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Bank of America, Citigroup and Bank of Nova Scotia launched in New York last Thursday syndication of their fully underwritten $1.5 billion deal for Levi Strauss, according to a banker familiar with the deal. The banks are looking only for participants and will not dole out any other titles. Commitment sizes and fees had not been finalized by press time, but one banker said the triumvirate will most likely seek amounts of $35 million, $25 million and $15 million. The new credit will refinance existing debt. B of A is administrative agent, Citi is syndication agent and Scotia is documentation agent. The banks equally underwrote the loan. Levi Strauss, based in San Francisco, designs, manufactures and markets clothing. A spokeswoman did not return calls seeking comment. The credit is structured as a $750 million, two-and-a-half-year revolver, a $350 million, two-and-a-half-year term loan "A" and a $400 million term loan "B." Pricing opens at 31/2% over LIBOR across all tranches. Pro rata pricing is based on a grid linked to the company's leverage for the first six months, and then flips to a performance-based grid linked to earnings before interest, taxation, depreciation and amortization. A banker familiar with the pricing scheme declined to provide the ends of the grid. The "B" tranche will remain fixed.

A $10 million piece of the Finova Group's '02 paper traded up last week at 70, moving from its previous level of 68. The seller was reportedly Asahi Bank, but that could not be confirmed by last week. Officials at Asahi bank did not return calls by press time. One dealer said this upward trend is consistent with the bonds moving up, as well as news that investor Warren Buffett is interested in the company's debt. "Because this company has financial assets it's easier to get a level," a trader said. "If the company were to go bankrupt you could still sell the loans. It's easier than selling inventory. Investment shops are willing to buy loans quickly because it's easier to get a handle on where it should trade." The Scottsdale, Ariz.-based company offers commercial financing to small and mid-sized businesses. A spokesman did not return calls by press time. Dealers put varying weight on whether Buffett's interest in Finova has nudged up trading levels. "I wouldn't say it's that. People have known for a while that he was interested," said one. Another believes the upward trend is due largely to Buffett's investment. "He may see there's significant value-he's a value player," said a market watcher. "With a finance company it's so hard to know [where it's headed] unless he's gotten a chance to look at the details of the portfolio. [Buffet's interest] is certainly good for it in the short-run. He's been wrong, but certainly more often he's right."

Joint leads UBS Warburg and BNP Paribas have decided to approach the ratings agencies with their $160 million credit for Hartz Mountain after another lukewarm reception from relationship banks, according to officials familiar with the deal. General syndication has been postponed until early February. "It's something we're considering," said one banker on the deal, declining further comment. Another official close to the matter said, "The ratings will determine the new pricing. The BBs might be a bit ambitious, but they're hoping. They'd be happy with BB-," said one banker close to the credit. He declined further comment. Officials at BNP, UBS and J.W. Childs did not return calls seeking comment.

Sierra Health Services (SIE) restated and amended its credit facility to $185 million after the company violated certain covenants on its $200 million loan, according to Paul Palmer, cfo in Las Vegas. "We wrote off goodwill and other assets and took a significant charge and fell out of compliance with certain covenants," Palmer said. SIE took charges of $141 million for goodwill impairment and $48 million for fixed-asset impairment, according to its 10-Q filed Nov. 14. The form also stated that the waivers included amendments to the credit that required the company to grant its lenders a security interest in certain personal property and reduce availability under the line of credit to $185 million. Syndication closed Dec. 15. Bank of America and First Union co-lead the credit. Bank officials declined to comment. Palmer explained that as of June this year, SIE was not in compliance with the covenants but had received waivers through Oct. 31. By Nov. 8, however, the company received a notice of default after it was unable to reach an agreement on new waivers with its bank group. "We've received all waivers needed and are in full compliance with the new facility," Palmer said. The form also stated that in June, the company had $185 million drawn on its previous $200 million deal.

Lead arrangers for Emmis Communications' $1.4 billion credit facility held a pooled sell-down on the pro rata portion and $200 million was reportedly shifted from the pro rata to the "B" term loan as the credit met with some resistance in the market. The moves--generally associated with tough going in the primary market--came even as the deal was touted as a strong credit by a rating agency, illustrating the point that media deals are having the same trouble telecom deals are having.

BNP Paribas and LaSalle Bank will launch at a bank meeting Wednesday in Chicago syndication of an equally underwritten $105 million deal backing Hyatt Corporation's construction of Continuing Care Retirement Community (CCRC). Hyatt has contributed $32 million of equity, and there are $21 million of operating and completion guarantees, according to sources familiar with the deal. BNP and LaSalle are co-arrangers and co-syndication agents. The credit is a five-year construction loan that will term out after one-and-a-half years. Pricing is 2 1/4 % over LIBOR, with a commitment fee of 1/2%. Bank officials did not return calls seeking comment. Frank Borg, senior v.p. finance of Hyatt in Chicago, declined to comment. Hyatt operates luxury resorts throughout North America and the Caribbean.

Bids for Charter Communications' credit facility have slipped to 99 1/2 from close to par due to a heavy supply of cable paper, dealers said. "There's a lot of cable paper out there. Insight is in the market," one remarked. Another dealer confirmed the level and agreed that the excess of paper from various companies is the cause. Charter, based in St. Louis, Mo., is a domestic cable operator. The company is going out for a high-yield offering of $850 million and went on a road show last Friday. Calls to Kent Kalkwarf, cfo, were referred to a spokeswoman, who declined to comment.

Bids for Conseco Inc. moved up last week to 80 from the mid-70s. "It should trade in the low 80s," a market watcher predicted. Traders say the company is enjoying improved numbers on the heels of investor Warren Buffett's interest in the bonds. "People are just feeling more comfortable with the company," a dealer said. "Conseco's business is also improving." The Carmel, Ind.-based company specializes in life insurance. Stock prices plummeted last year after the company bought Green Tree Financial, but have since risen as news of Buffett's investment broke. A spokesman for Conseco wasn't aware of any loan trading, but added, "It doesn't surprise me, considering Berkshire Hathaway had been buying Conseco debt." He mentioned that the company's corporate bonds are now trading in the par range and that he expects the loan pieces to follow. "Our world started at the beginning of July in terms of building a new Conseco," the spokesman said. Changes included selling off five pieces of Green Tree, cutting 150 jobs and saving $150 million in annual expenses. The company plans to pay off $3 billion in debt over the next three years. "We're about two-thirds of the way through a substantial turnaround. The meeting of those debt payments is driving the value of our debt higher," he said.

Moody's Investors Service assigned a Ba3 rating to the $1 billion guaranteed senior secured credit facilities of Semiconductor Components Industries due to anticipated softening in the end-use markets of wireless communications and computers. The Phoenix, Ariz.-based company is the largest independent supplier of semiconductor components. "The problem with a lot of these semiconductor businesses is that visibility is not very clear starting out 2001. With softness over the last several months, a company whose revenues and cash flow has been growing throughout the first three quarters of 2000, may be peaking and we don't know that," said Howard Sitzer, analyst. The rating also factors in the risk associated with future acquisitions. The company recently acquired Cherry Semiconductor and keeps a watch for potential beneficial acquisitions, said a company spokesman. "They're not denying or precluding future acquisitions, so that would be a risk issue. It would be for any company," said Sitzer. "Any acquisition has integration issues that can be problematic. You've got to align your engineering teams, align your sales and marketing effort." He added that Cherry Semiconductor has done well since the acquisition.

Moody's Investors Service notched down the rating on Bethlehem Steel's $600 million inventory secured bank facility to Ba3 from Ba2 because of the market's impact on the company's operating performance. Operating margins have declined to negative 2.5% for the third quarter from a previously narrow 2.4% in the second quarter. Debt protection measures are weaker, with earnings before interest, taxation, depreciation and amortization (EBITDA) interest coverage at 1.4 times, down from 4 times for the first half last year. Furthermore, prices have fallen along with demand, while imports have been reaching record levels. Moody's acknowledges that the company is reducing costs and cutting capital expenditures. J.P. Morgan leads the deal, according to Capital DATA Loanware. A company spokesman for the Bethlehem, Pa.-based steel producer declined to comment. • Moody's lowered Quality Distribution's $360 million bank facility to B1 from Ba3 after the company reported a third quarter revenue decrease of 4.9% to $149 million. Earnings before interest, taxation, depreciation and amortization (EBITDA) for the nine months ended Sept. 30 last year was $56 million versus $62 million for the same period in 1999. Leverage is also high at 5.3 times, and adjusted last 12 months EBITDA to interest coverage was 2 times. The rating considers, however, debt reduction of $17 million to $417 million since year-end 1999. Credit Suisse First Boston, BT Alex. Brown and Salomon Smith Barney are the mandated arrangers, according to Capital DATA Loanware. Richard Brandewie, cfo of the bulk chemical transporter in Tampa, Fla., did not return calls.

The additional $550 million J.P. Morgan Chase tossed to Federal-Mogul to help pay for asbestos liability claims split up the seniority of existing debt, sparking trades at levels far above where the credit had been lolling. A $15 million piece of the $1.75 billion credit facility changed hands at about 60 Thursday, after $3 million was traded Wednesday at 55. Those numbers are up considerably from levels just two weeks ago, when the paper was bid at 38.

Daisytek International, a wholesale distributor of computer and office supplies, has signed a $120 million credit facility to fund operations and acquisitions, replacing an existing $105 million facility due to expire at the end of the month. George Maney, cfo, says the new facility allows the company to borrow against assets and cash flow, as opposed to borrowing against only assets before. "It provides us the flexibility to carve out receivables and inventories and borrow an additional $50 million. It allows us to double-dip," he explained. BANK ONE and Bank of America lead the new deal, which went out to bid. Chase Manhattan Bank led the former deal and opted not to bid for the new facility. "Chase wanted to stay with the old borrowing-based facility," Maney said, adding that none of the banks in the old syndicate are in the new one for the same reason. He explained that the company's management changed last summer when PFS Web spun off from the company. The company pursued the new financing in part to fund acquisitions.