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About $450 million in institutional tickets rolled in for Rite Aid Corp.'s $1.15 billion "B" piece after last Wednesday's bank meeting. Citigroup and J.P. Morgan lead the company's $2 billion refinancing package. A banker familiar with the deal said about $200 million was committed by buysiders ahead of the meeting and then another $250 million was committed afterwards by the "B" investors. About $1 billion has been committed by pro rata players who will take portions of the "B" loan and the $850 million revolver, the banker added. Both tranches are priced at LIBOR plus 33/4%. An official at Citi and a J.P. Morgan spokesman declined to comment.

WorldCom's bank debt rallied again this week trading into the 28 1/4 - 28 3/4 range with one dealer estimating that more than $25-35 million of the paper changed hands last Thursday. Two weeks ago, the name was trading in the 26 27 1/2 range after the company filed its plan of reorganization. Market players said the name moved up with AT&T Corp.'s strong earnings and positive sentiment toward the telecom industry. Stronger earnings for AT&T, a WorldCom competitor, gives hope to WorldCom's creditors, who are likely to receive a sizable portion of their recovery package in equity. The business model should work, said one trader. In addition, one dealer said a telecom industry report, citing WorldCom as a possible acquisition target, also gave a boost to the name. Bob Blakely, WorldCom's cfo, could not be reached by press time.

Monro Muffler Brake has obtained a new $110 million credit facility with an adjusted debt-to-EBITDAR (EBITDA plus rent) covenant that allows the company to tap the funds under the deal to pursue acquisitions. Since the former credit was completed in 1998, Monro Muffler has paid down about $40 million of debt, performed well, digested the acquisition of 205 stores from Speedy Muffler King, and is now ready to pursue more acquisitions, explained Catherine D'Amico, Monro Muffler's executive v.p. of finance and cfo. But the former credit was structured so that the debt-to-EBITDAR covenant stepped down annually and at the time of the refinancing was 3.5 times, restricting the amount the company could use for acquisitions.

Nextel Communications' bank debt has been ticking up since the company filed a shelf registration on March 27 for up to $5 billion in new securities. Market players speculate that the digital mobile phone operator could be one of the seasoned issuers poised to tap the capital markets for new financing. The company's "B" piece was quoted in the 96 96 1/2 context prior to the shelf registration and was trading in the 97 1/8 98 1/4 range last week, buoyed partly by Nextel's strong quarterly earnings report.

About $30 million of NRG Energy's bank debt was sold in pieces in the 41-41 1/2 context by a European bank last Thursday. This follows the trading of a $40 million piece that changed hands in the low 40s less than two weeks ago, according to traders. The trades mark an uptick in the market for the company's bank debt from the 36 level, where the paper was trading last month. In March, the paper rallied from the 30 level after NRG's bank debt steering committee and the majority of its long-term noteholders reached a tentative settlement with NRG-parent Xcel Energy. Under the terms of the agreement, NRG will receive a $752 million payout from Xcel in exchange for the release of all claims NRG has against Xcel (LMW, 3/31).

The market for The NutraSweet Company's "B" loan is down roughly seven to nine points since the end of March, according to LoanX, and market players are expecting weaker numbers from the aspartame producer. The company recently received an amendment from its bank group to adjust its financial covenants to fit more appropriately with the company's plans, explained Adam Suttin, a partner with J.W. Childs Associates, which purchased NutraSweet in 2000. He noted that NutraSweet was not in default; rather the amendment was a pre-emptive measure. Suttin declined to be specific on which covenants were affected.

Arthur Penn, the ex-global co-head of leveraged finance at UBS Warburg, who resurfaced at French bank CDC IXIS North America a few months ago, started work with Apollo Management last Thursday. Sources familiar with the situation said Penn is helping to develop a debt capital markets investment business and will soon begin the fundraising for the Apollo Distressed Investment Fund, which will look to buy bank debt, bonds and preferred securities. One source said Apollo is not looking for control situations, but instead distressed investments.

Steel Technologies was able to increase its revolver capacity from $125 million to $151 million due to its solid bank relationships and past ability to pay down debt despite the economic climate, said Joseph Bellino, cfo and treasurer. Bellino said the flat rolled steel producer has managed to keep its leverage relatively low--last reported at 2.35 times-- despite expanding the unsecured facility. "We are able to pay down debt even in a weak economic cycle," he added, noting that the company had previously paid down around $27 million of drawn bank debt on its revolver.

Franklin Templeton Investments is looking to raise debt for a new collateralized loan obligation after strong reverse inquiry from equity investors in the firm's previous deals encouraged the San Mateo, California money manager to hit the road for the fourth time. Officials at Franklin declined comment on the private placement. One investor said none of the firm's three previous CLO deals have been downgraded, while the equity returns have been north of 20%. Merrill Lynch's CDO group is underwriting the cash-flow deal, named Franklin CLO IV, which is targeted at $300 million. Most of the assets were bought last fall when spreads were high, said the investor, but exact amounts of the portfolio bought could not be determined. Commenting on the task of raising the equity, the investor said it is an issue not being able to travel to Toronto and Hong Kong due to fears over SARS, where some CDO investors are based. "Certainly people won't be holding roadshows in Hong Kong or China," said one buysider. But there is no problem going to Japan or Korea where investors are also located.

Royal Caribbean Cruises has completed a five-year, $500 million credit facility with an evergreen provision that allows the credit to be increased up to $1 billion. The provision permits more banks to commit to the revolver even though the original credit agreement was signed last month. Bonnie Biumi, acting cfo, explained that the cruise-line company was targeting a facility ranging from $700 million to $1 billion, but accepted the $500 million amount after market and world events slowed lender commitments from rolling in before the targeted first quarter deadline. The provision gives the company flexibility, and banks can come in at anytime, she said.

A smoking high-yield bond market has been pushing up prices in the secondary loan market over the last couple of weeks as issuers are choosing to tap the high-yield market and are paying down their bank loans. Those paydowns are increasing the value of existing debt as the new issue calendar is still somewhat thin and investors are scurrying around the secondary market to pick up assets. "There certainly is more integration than there was in the past," said Martin Fridson, high-yield expert and CEO of Fridson Vision, commenting on the link between the bond and bank debt markets.

This Wednesday is the deadline for Allegiance Telecom to cut its debt almost in half but all is quiet on the bank debt front with the market for the company's term loan holding firm in the mid-60s. In conjunction with an amendment to the company's credit facility late last year, Allegiance pledged to reduce its $1.275 billion debt load to $660 million by April 30. When LMW went to press last week, there was no word of the company's plans to deal with the deadline and calls to Thomas Lord, Allegiance's cfo, were not returned. According to company filings, Allegiance may exchange cash or equity for its debt and may choose to pursue the transactions through exchange offers or a pre-packaged bankruptcy proceeding.