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National Equipment Services' senior secured bank credit facility has been lowered to CCC by Standard & Poor's due to concerns regarding the company's liquidity and upcoming loan maturities. S&P also placed the ratings on watch with negative implications. The downgrade reflects the belief that NES may not be able to refinance or extend maturities on its $550 million line of credit due in July, or meet its upcoming $14 million interest payments on its subordinate notes in May. "The company has significant maturities and liquidity issues," said John Sico, analyst at S&P. Calls to company officials were not returned.

A $10 million piece of Mirant Corp. was rumored to have traded at the 79 level a week ago last Friday, although some dealers doubted that the trade went off. Traders said Mirant bank debt rarely changes hands. There was a wide discrepancy regarding the levels of the bank debt piece before the rumored trade with market players noting the paper was quoted anywhere from the low 60s to the mid-to-high 70s.

NRG Energy's severely depressed bank debt regained more than five points last week after the independent power producer's parent, Xcel Energy, announced an agreement with NRG creditors that would give NRG a larger-than-expected payout. NRG has been working toward a restructuring plan since August, but the latest development will allow Xcel and NRG to sever ties. The settlement, which is $452 million more than expected, comes with the release of all NRG claims against Xcel and paves the way for NRG to seek a prepackaged bankruptcy plan.

J.P. Morgan and Deutsche Bank are preparing to market a $1.6 billion bank deal that will consolidate and refinance the combined debt of Riverwood Holdings and Graphic Packaging, which are set to merge. The overall debt of the two packaging companies will be $2.2 billion, and investors are expecting a hefty "B" loan to liven up the market.

The Alcentra Group, the leveraged loan asset management shop formed last year through the acquisition of Imperial Credit Asset Management (ICAM) in the U.S. and then Barclays Capital Asset Management in Europe, is on the road with a new collateralized loan obligation called Pacifica II. The $300 million deal will consist mainly of U.S. leveraged loans with the underwriting role split between Credit Suisse First Boston and TD Securities. A source said the use of two lead underwriters is not that unusual considering the current markets. Furthermore, even though spreads are rising on the AAA liabilities, the underlying spreads are "pretty healthy." Pricing on the notes is scheduled for sometime within the next three months, the source added.

Despite a heavy focus on HealthSouth Corp. last week, none of its bank debt changed hands in the secondary market. Traders quoted the paper in the 80s when net-backs due to unfunded commitments are taken into account, and in the mid-60s when only the net-backs from letters of credit were included. One dealer speculated that the paper could ultimately be worth about 55 cents on the dollar. Last week, the company's banks blocked the $350 million in maturity payments due on HealthSouth's 31/4% convertible notes and a $17 million interest payment due on its 103/4% notes. He said that about 25% of the company's $1.25 billion revolver is estimated to be funded with another 6% being allocated to letters of credit. A spokesman for the company declined comment.

AES Corp. bank debt got a slight boost from the news that the company has reached agreements to conduct three asset sales that will produce about $327 million in proceeds. The company's "B" piece was quoted in the 97 3/4 98 1/2 context, up from the 96 1/2 97 1/2 range after the news. AES will apply 80% of the proceeds from these latest asset sales to its senior bank and bond debt on a pro rata basis, explained Ahmed Pasha, AES' investor relations spokesperson.

Aurora Foods was a touch stronger last week as market players anticipated positive news at the company's bank meeting last Tuesday. The bank debt was quoted last Monday in the 92-93 1/2 context up from the 91-92 range. The details of the bank meeting could not be determined, but the bank debt held its levels after the meeting. Traders did say that pending asset sales were not discussed. Aurora Foods has been working toward the divestiture of its frozen foods businesses and has stated that a sale is expected in the near future.

PNC Bank and National City Bank kicked off syndication of a $175 million refinancing credit last Thursday for carbon compound and forest products producer Koppers. The deal includes a four-year, $100 million borrowing-base revolver and a four-year, $75 million "A" loan. Donald Davis, v.p. and cfo of Koppers, said the meeting was well attended, declining to discuss specific pricing details. But, he noted that the rates are comparable to Koppers' existing facility.

BlackRock Financial Management is returning to the CDO market with Magnetite V, a $300 million leveraged-loan backed collateralized debt obligation. Bank of America is the lead underwriter, as BlackRock, the asset management arm of PNC Bank, seeks to complete another deal in the Magnetite series. BlackRock has funded a series of five leveraged finance CDOs, including two market value collateralized bond obligations (CBOs), two cash flow high-yield CBOs and one CLO, which together totaled $2.6 billion.

Bob Votteler, v.p. and treasurer of Central Parking, is relieved that the company's $350 million credit is finally closed after some ill-timed company news last month almost jeopardized the deal's completion. "I couldn't begin to tell you how happy I am that it's done," Votteler told LMW. He explained that "sort of a perfect storm" hit the parking facility company at the time the credit was cruising en route to a done deal. A reported invoicing error that reduced earnings, the resignation of CFO Hiram Cox and a related stock decline all caused ticket-holding lenders to second guess the credit (LMW, 2/24).

Los Angeles-based asset management firm Centre Pacific has shelved plans for a high-yield collateralized loan obligation (CLO) and is instead seeking to complete a synthetic investment-grade transaction. This will be the first time Centre Pacific has managed an investment-grade structured deal, but the conditions for issuing high-yield CLOs are not opportune, said David Gold, managing director of Centre Pacific. "Issuing the notes/equity is the difficult task in the current environment. Synthetic investment grade issuance is rapid and more certain today," he said. Centre Pacific will be looking for a lead bank in order to execute a transaction in the second quarter, he stated.