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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.

Stone Tower Capital is attempting to raise the debt for its debut collateralized loan obligation, which will be composed of up to $300 million of secondary market leveraged loans bought from Credit Suisse First Boston. CSFB is also the lead underwriter for the deal, said to be structured as a static pool with no re-investment options and a short tenor of approximately three-and-a-half years. The manager will be able to sell problem loans. "It's very compelling, very different and very interesting," said one loan market source.

UBS Warburg is raising the debt for Prudential Capital Group's Dryden 4 collateralized loan obligation. The prospective deal comes shortly after Ross Smead's leveraged bank loan group at Prudential raised debt for the $304 million Dryden 2002-3 CLO last December. Investors in CDO paper are said to be looking at the approximately $300 million deal over the coming weeks. This will be the first CLO that UBS has underwritten since bringing on board Mike Rosenberg and Jeff Herlyn as co-heads of the global credit CDO group from J.P. Morgan in March. UBS officials declined comment and Smead did not return calls. The last Prudential CLO was underwritten by Salomon Smith Barney.

Wachovia Securities is shopping a $225 million term loan for Gray Television that replaces the company's existing "B" loan at a tighter LIBOR plus 21/4% spread. The new "C" tranche will take out the "B" piece, which is priced 50 basis points higher, said a banker familiar with the credit. The existing credit was completed last October and includes a seven-year, $75 million revolver and an eight-year, $375 million "B" piece. The banker said the combination of better market conditions and improved company performance prompted Gray to seek the refinancing. He would not specify commitment levels to the loan as of late last week. James Ryan, v.p. of finance and cfo of Gray, could not be reached by press time.