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RBS Greenwich Capital has hired Philip Kearns from Morgan Stanley to head up the new position of volatility trading at the firm, according to Doug Greenig, the firm's co-head of derivatives and agency mortgage-backed securities. Kearns did not return a phone call seeking comment. At RBS GCM, Kearns will be a managing director, the same title he held at Morgan Stanley. At RBS GCM, Kearns will report to Greenig and derivatives group co-head Ed Orenstein.

Republic National Cabinet Corp. (RNCC) has obtained a new credit facility, which backs the company's buyout by equity sponsor the Cypress Group. The play for RNCC comes as the sponsor increases its focus on the building products sector, a growing part of which is the cabinet business, explained David Spalding, v.p. and chair of the Cypress Group. The cabinet business is very fragmented, stated Spalding. "There clearly are ample properties out there," he noted, adding that there are currently no other specific targets.

Salomon Smith Barney is in the market with a $300 million collateralized loan obligation that is called Madison Avenue CDO IV. The manager responsible for the Madison Avenue series is Metropolitan Life Insurance Co., said an analyst. The vehicle joins a pipeline that continues to grow. Only Katonah Capital Management had priced a deal this year as Loan Market Week went to press (LMW, 2/10).

The Altman NYU-Salomon Center defaulted bank loan index started the new year positively, with advancing bank loan facilities outpacing decliners in the 57-facility index, for the first month of 2003. Advances were led by Kmart, Conseco, Federal Mogul and Owens Corning, according to research by Edward Altman, Max L. Heine Professor of Finance at New York University. The defaulted bond index comprised of 121 issues rose by 6.21% in January. Adelphia, National Steel, Big City Radio and NRG Energy made the biggest advances.

AMR Corp. and its primary subsidiary American Airlines have endured a prolonged period of negative cash flow and a lack of significant cost structure reduction. This provides an outlook for continued cash losses, states Moody's Investors Service, which has downgraded AMR's senior implied rating from B1 to B3, as well as AMR and American's senior unsecured ratings from B2 to Caa2. Despite $2.8 billion in cash on its balance sheet, Moody's notes that an increase in lease-adjusted debt, limited access to capital markets and the erosion of the airline's once substantial net worth has significantly reduced its financial flexibility. Earnings have been affected by a slow revenue environment and continued high costs, with EBITDA results negative for the past eight quarters, according to Moody's.

A high-yield buy-side and a sell-side analyst see continued pressure on the bonds of Collins & Aikman in the wake of recent selling pressure. During the two-week period ending last Wednesday, the auto parts manufacturer saw its 10.75% senior notes of '11 (B1/B) drop from par to a bid of 94.

Wachovia Securities is in the market with a $400 million collateralized loan obligation for David L. Babson & Company, according to market sources. The vehicle will be the first one since Babson completed the acquisition of Wachovia's institutional leveraged loan asset management business, First Union Institutional Debt Management (IDM). Portfolio managers John Wheeler and Tom Finke did not return calls for comment. Officials at Wachovia also did not return calls.

Bear Stearns and Merrill Lynch were betting that Penn National Gaming's earnings call last Wednesday would spark an uptick in commitments on the company's $600 million "B" piece. Last week, pricing was flexed up from LIBOR plus 31/ 2% to LIBOR plus 4%, while the pro rata spread increased from 3% to 31/ 4% over LIBOR, according to a banker familiar with the deal. The "B" had been half filled before the pricing boosts and the banker stated that momentum had picked up since the changes. Both big and small tickets have rolled into the loan since Penn National's retail launch, however the banker would not comment on updated levels.

Banc of America Securities has hired Dave Fergione, the former head of high-grade, fixed-income at BNP Paribas in New York to the new position of managing director, corporate bond trading, based in the firm's Charlotte, N.C., headquarters. Fergione's move marks his second stint with Banc of America. He left BNP at the end of last year (BW, 12/23) in what he characterized as a mutual decision during an interview last Monday.

Bank of America's fully underwritten $235 million deal for National Bedding Company has closed after some tranche shifts, including an increase to $140 million on the previously $100 million "B" piece. A banker familiar with the deal said that the five-and-a-half-year "B" had been oversubscribed at the initial level and there were no plans to increase the size of the credit. The "A" loan was reduced from $75 million to $35 million, he added, while the revolver stayed at $60 million. The five-year senior secured pro rata priced at LIBOR plus 3%, while the "B" priced at LIBOR plus 33/ 4%. National Bedding's leverage figures are 3.3 times senior and 3.4 times total, the banker added.

Burns Philp & Co. is relying heavily on debt to finance its bid for the Australian and New Zealand consumer-branded packaged food company, Goodman Fielder, according to Moody's Investors Service. Burns is looking for a A$100 million revolver, a A$1.3 billion "A" term loan, a US$375 million "B" piece and a US$150 million senior subordinated notes issue to fund the A$2.4 billion (US$1.4 billion) unsolicited cash offer for Goodman (LMW, 2/10). Noting the increased leverage as a result of the acquisition, Moody's has assigned a B1 rating to the new credit facility and a B3 rating to the subordinated notes.