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Block trades fire up Hang Seng

COVER STORY PART IV

Commercial banks are laughingly said to be turning into bond fund managers with expensive branches. And central banks agonize over the conflicting twin objectives of exchange-rate management and investment returns, writes Pauline Loong. Country reports from Louis Beckerling, Maggie Ford, Park Sang-soo and Dominic Jones. Additional research by Gina San and Keith Coln. --- COVER STORY PART I

COVER STORY PART III

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Vanity Fair or Loan Market Week? Loan traders and bankers have been clamoring for pictures of their friends, colleagues and themselves since snapshots from the Best Trading Desk Awards ceremony held last month were placed in last week's issue. In response to the unprecedented call for more pictures, LMW has placed many extra candid camera moments on our web site at www.loanmarketweek.com. Pictures will go live Monday afternoon.

New York Life Investment Management is in the market warehousing loans for a new collateralized loan obligation called NYLIM Flatiron CLO 2003-1. The $350 million cash flow CLO is being lead managed by Goldman Sachs. Timing for the pricing of the notes to raise the debt could not be determined and calls to a New York Life loan manager were referred to an official in Goldman Sachs CDO group, who did not return calls.

Global eXchange Services (GXS) recently completed $205 million in new debt financing to take out a $210 million bridge financing that Credit Suisse First Boston provided to the company last September. "[The new financing] gives us a permanent capital structure that allows us to focus on the business," noted Michael Salvati, recently appointed cfo of GXS. The bridge loan was set to expire this September. "We were looking to make sure that we didn't come down to the wire," he added. Last year after finding the loan market unreceptive, CSFB pulled a $210 million credit backing Francisco Partners' acquisition of GXS and funded the deal itself (LMW, 10/02).

Huntsman International's bank debt dropped into the low 90s last week after the company postponed its planned bond offering, a move first reported on LMW's Web site. The decision to pull the deal came after the company found that an excess amount of high-yield issue left the market "uncompetitive," noted Sean Douglas, Huntsman's treasurer. The company will bide its time and come back at a different time, he added. The bond deal, led by Deutsche Bank, was slated to pay down a portion of Huntsman Corp.'s $450 million "B" loan. In anticipation of the pay down, the market for the bank debt ticked up as high as 963/4-97. After the postponement, pieces of the company's term loan "B" were said to have traded in the 92-94 range, but those trades could not be confirmed. Deutsche Bank also leads the bank debt, but officials at the bank declined to comment.

Citigroup had more than half of Accuride Corp.'s $190 million second lien term loan filled as of late last week, according to a banker familiar with the deal. The tranche is priced at LIBOR plus 61/4% with a 2% LIBOR floor and an original issue discount of 2%. The banker added that the $50 million revolver, which is priced at LIBOR plus 4%, is fully subscribed. Proceeds from the $240 million deal will refinance the truck and trailer wheel maker's existing revolver and "A" and "B" loans.

Merrill Lynch was expected to close Colfax Corp.'s $315 million credit last Friday, in accordance with the company's projected completion date for its $113.4 million acquisition of Netzsch Group. Since the credit's BB-/Ba3 ratings were announced last week more investors were expected to commit to the credit, said an official, but those commitments could not be confirmed by press time.

Qwest Corp., a subsidiary of debt-laden Qwest Communications International, is seeking a $1 billion term loan from a seemingly responsive bank debt market. Despite being a senior unsecured deal, investors are still keen on the loan's closeness to the former US West assets, which now comprise Qwest Corp. Qwest acquired baby bell US West in 2000. "[Qwest Corp. is] probably the safest part of the company," said Michael Schroeder, president of investment management firm Wasmer, Schroeder & Co. "That's where all the cash flow is." An investor concurred, noting that would help balance out the fact the deal is unsecured and pari passu with the company's other senior unsecured debt.