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Lehman Brothers will be shopping Rent-A-Center's $600 million refinancing deal this week after it secured the role as joint-lead arranger with incumbent lead J.P. Morgan. A banker said Lehman is on the left running the deal, while J.P. Morgan is on the right. Lehman got the top spot because of its knowledge of the rent-to-own store chain on the equity side, said Robert Davis, v.p. of finance, cfo and treasurer. "They understand the company from that perspective," he said, adding that Lehman got a package deal to lead all of the company's debt and equity recapitalization plans, which include the credit facility, tender offers for shares and a notes offering. The banker added that Lehman's pitch for a Dutch Auction secured the package deal for the firm. The company intends to buy up to 2.2 million shares pursuant to a modified Dutch Auction and it is also in an agreement to buy additional shares from Apollo Investment Fund IV and Apollo Overseas Partners IV.

Mirant Corp. bank debt ticked up into the mid 80s last week following the company's earnings report as market players anticipate receiving additional security for their exposure in connection with planned debt restructuring efforts. A $10 million piece of the bank debt was believed to have traded the day before earnings came out. The levels where the trade went off could not be confirmed, but traders said the market for the name was in the 771/2 78 context at that time.

Norcross Safety Products has obtained a new credit facility to provide ample liquidity for acquisitions as the company eyes European safety companies and other domestic ones as possible targets, said David Myers, executive v.p. and cfo for Norcross Safety. The company is looking to close on a transaction during 2003. The facility will also be used to foster organic growth and to retire Norcross Safety's existing credit facility. The new credit comprises a $30 million revolver and a C$10 million revolver both with five-year terms and a six-year, $130 million term loan.

The $200 million refinancing credit for Central Garden & Pet Co. was nearly three times oversubscribed late last week, with lead arrangers CIBC World Markets, SunTrust Bank and Bank of America considering a reverse price flex for the $100 million "B" loan. The six-year institutional piece, is priced at LIBOR plus 3%, and would probably tighten to LIBOR plus 23/4%, said a banker familiar with the deal. There is also a five-year, $100 million revolver priced at LIBOR plus 21/4%. The facility also includes a $75 million accordion feature, subject to the lenders and specified covenants. A CIBC official declined to comment, while B of A and SunTrust bankers did not return calls.

Adelphia Communications Corp.'s Century Cable term loans moved into the 80s range up from the mid-to-high 70s last week. The piece of the Century Cable facility dubbed "Century New" by traders, due to its more recent issue date, traded at 80 and the "Century Old" bank debt was bid at 81 by midweek. The recent uptick marks the highest levels that the Century Cable term loans have seen since last summer. Market players said there were no developments concerning the company's bid to reorganize. Instead, the rally was driven by investors who were scrambling to buy paper.

FleetBoston Financial and CIBC World Markets filled out half of a $140 million "B" loan for Affinity Group after the bank meeting last Wednesday. A banker familiar with the refinancing credit said General Electric Capital Corp. came in at the agent level, but a GE spokesman could not confirm that. Pricing on the institutional loan is LIBOR plus 4% with an up-front fee of 25 basis points, the banker added. There is a five-year, $35 million revolver priced at LIBOR plus 31/2% also included in the BB-/Ba3-rated deal.

Allegiance Telecom was facing an imminent default last week, causing Fitch Ratings to downgrade $500 million in secured credit facilities, the 113/4% senior discount notes due 2008 and 127/8% senior notes due 2008 to C from CC. According to Fitch, Allegiance will have great difficulty reducing its debt levels to meet the requirements of an amended credit agreement, which required the company to reduce total indebtedness to $645 million from $1.2 billion by April 30. Last November, the company reached an agreement with its creditors modifying some of the terms of its credit facility. Allegiance received a waiver of its existing financial covenants through April 30 and replaced them with a free cash flow from operations covenant and a leverage covenant.

Ares Management's latest collateralized loan obligation includes a wrinkle in its equity piece designed to entice investors who are restricted to buying rated CDO paper. The deal was priced last week and the equity piece is expected to be rated and classified as a triple-B tranche. Usually the equity piece is unrated and does not guarantee a fixed coupon. But the $50 million Class C notes of the Ares VII deal will be rated to the return of principal and a rated coupon, thereby giving the equity tranche the interest component of a bond even though the notes are truly equity in that they are in the first loss position of the capital structure, explained Elizabeth Russotto, senior director at Fitch Ratings. Deutsche Bank was the lead underwriter of the deal. Officials at Deutsche Bank and Ares did not return repeated calls.

A mass of Charter Communications' various credit facilities traded in the last couple of weeks as one bank was said to be paring down its exposure to the name in anticipation of the Shared National Credit (SNC) exam. The bank believes that there is a chance that Charter will have to restructure and will be deemed a non-performing loan by the exam, said one trader. Pieces of Charter's operating company facility and Falcon Cable facility were said to have traded in the mid 80s to low 90s depending on the tranche.

Some of the lenders on Allied Waste Industries' recently syndicated $1.5 billion revolver reportedly were paring their exposure in the secondary market last week, selling off the loan as low as 921/2. Market players said the banks signed onto the revolver last month to win investment banking fees. One trader explained that although it was logical to believe that the investment banks, which took on the largest portions of the revolver, were the ones selling, some of the banks with smaller exposures were doing the trades. A total amount on the trades could not be determined. There was some doubt that paper actually traded hands. "They would certainly lose money on that paper," one dealer said, noting the steep discount at 921/2.

Credit Suisse First Boston pitched a five-year, $75 million add-on "B" piece for real estate services company CB Richard Ellis last Thursday. A banker familiar with the deal said some commitments were obtained after the meeting, but he would not specify the level of subscription. The fully underwritten loan backs the company's $415 million all-cash acquisition of New York-based Insignia Financial Group. CSFB is shopping the B+/B1-rated deal with a LIBOR plus 41/4% coupon, which is the same rate as the original $185 million institutional piece. The loan will join the Los Angeles-based company's CSFB-led amended and restated credit, originally put in place in 2001. The entire deal now includes a $90 million revolver, a $50 million "A" loan and a $260 million "B" piece. The pro rata is priced in the LIBOR plus 31/4-33/4% range.

Denali Capital is shopping for its third collateralized loan obligation, the $400 million Denali Capital CLO III, that will target middle-market loans, a rarely tapped area in the CLO universe. Though the vehicle will tap the broadly syndicated loan market--deals over $250 million--Denali will aim for a meaningful level of middle-market loans as they offer better spreads, higher initial fees and better credit packages, according to a source. Credit Suisse First Boston reportedly is underwriting the deal, but a source said Bear Stearns was the lead. Officials at CSFB did not return calls and a Bear Stearns CDO banker declined comment. David Decker, Denali's cfo, also declined to comment on the prospective deal.