Search results for

Advent Capital, a New York-based money manager with $1.7 billion mostly in convertible bonds, has hired Les Levi to manage and expand its high-yield asset pool. Levi left J.P. Morgan Securities late last year. He was a managing director focusing on high-yield bonds and loan origination. Prior to that, he ran the firm's high-yield telecom and media research group. Levi says he took the newly created position to work on the buy-side. He reports jointly to Odell Lambroza, a senior portfolio manager, and Tracy Maitland, Advent's ceo and founder. A call to Lambroza was not returned.

Many fixed-income professionals are not convinced that newly annointed nationally recognized statistic rating organization (NRSRO) Dominion Bond Rating Service, which has 41 analysts compared to 800 at Moody's Investors Service and 1000 at Standard & Poor's, will be a factor in the market. Tom Parker, a high-yield portfolio manager at Barclays Global Investors, argues that the ratings agencies have run into trouble in recent years because they judge the creditworthiness of a company according to its market cap. Enron and WorldCom proved that bigger is not better when an economic bubble bursts and you don't have any earnings, he says. "How does Dominion change this? The answer is it doesn't," Parker says. "The agencies still have the same problem. How do you adjust to an environment where size isn't the key variable? Adding five other independent ratings agencies doesn't change that either."

Abbey National will use securitization as part of its effort to dispose of its nearly £40 billion bond portfolio, says an Abbey insider. Some of the bonds will be packaged into collateralized debt obligations, he says. The U.K. bank has announced its intention to exit wholesale banking and concentrate on its retail business. In addition, the bank will look to repackage and dispose of the collateralized debt obligations held on balance sheet, says the insider.

Advest Inc., a regional brokerage and investment-banking subsidiary of The MONY Group, has hired Rich Musumeci, to the new position of managing director and co-head of credit trading. The hire is the first part of a plan to significantly expand the firm's fixed-income business, says Joe Blair, executive v.p. and head of Advest's capital markets group. "It's a desire to expand something that's working well," he says, adding that revenues from the business were up 60% and profits by over 100% last year.

AIG Global Investment Corp. is prepping a collateralized debt obligation backed by private equity partnerships. The $1 billion deal, underwritten by Morgan Stanley, will be AIG's first collateralized fund obligation and is set to close this month. Jon Strain, head of the CDO syndicate at Morgan Stanley, did not return a call, nor did David Pinkerton, the AIG portfolio manager in charge of the ramp-up of this deal.

Investors last week jumped all over the fat coupon on a $200 million, three-year "B" loan for CITGO Petroleum. The deal was priced at LIBOR plus 51/ 4%, a big hike from the spread of about 100 basis points over LIBOR for previous facilities. The deal closed in three days and is already allocated. The Credit Suisse First Boston-led deal accompanies a $550 million bond deal and a $200 million accounts receivable facility. The stiff pricing boost is most likely a result of all the uncertainty in the market over Venezuela, said Thomas Coleman, senior v.p. at Moody's Investors Service. "The market is extracting a huge premium," he stated. The company's cash flow has been affected directly and indirectly because of the oil strikes and political shakeups in Venezuela.

Credit Suisse First Boston is set to eliminate all assignment fees on CSFB-agented deals, no matter which firm trades the bank loans, as long as counterparties agree to settle electronically. The move is designed to spur use of electronic settlement in the secondary loan market, where par trades settle T+10 and distressed trades can take months. It also confronts the thorny issue of assignment fees, which annoy investors and draw testy lines between dealers.

Dean Foods Company-- formerly Suiza Foods-- has effectively integrated its December 2001 acquisition of Dean Food Corp. and reduced its leverage since the $1.7 billion transaction. Based on this post-acquisition rebound, Moody's Investors Service has upgraded Dean's senior secured rating from Ba2 to Ba1. Since the purchase, Dean has become the largest fluid milk processor in the U.S. and the only one with national reach, Moody's states. Scale, a favorable cost position in the industry and customer and supply diversity also works in the Dallas-based dairy product company's favor. Moody's notes that Dean has durable cash flow, as milk is a food staple with stable demand levels. Additionally, Dean has realized over $100 million of cost savings, compared to the initial $60 million targeted after the acquisition.

Investment banks with both restructuring and mergers and acquisitions practices such as Chanin Capital Partners, Houlihan Lokey Howard & Zukin and Ernst & Young Corporate Finance (EYCF) are pitching to traditional private equity firms the purchase of bank debt or bonds of distressed companies as an acquisition strategy. With private equity investing becoming more competitive owing to a lot of money chasing a few good deals, acquiring a good company with a bad balance sheet through the purchase of its debt in the secondary market is an alternative way to gain control of the company and have a good return on investment, explained Richard Morgner, managing director at Chanin. He said he has received some 30 inquiries over the last three to six months from private equity clients, whom he declined to name, that are interested in exploring the strategy.

Dutch mortgage originators using the securitization market for funding purposes, are increasingly looking to add dollar tranches to their residential mortgage-backed securitizations as a way to diversify their investor bases, say securitization bankers and issuers.

A $16 million auction of El Paso Corp.'s $1 billion credit expiring in August was completed in the 93-94 1/2 context late last week. The identities of the parties involved in the transaction could not be determined. Bank debt for the company has rallied over the past week, with market players anticipating that the August credit will be completely taken out. Additionally, news that the company is moving forward with its restructuring plans, which include asset sales and new financing, pushed the August bank debt up from the 86 1/2 87 1/2 range.

Spiraling fee costs and a diverse roster of creditors are contributing to an already complicated restructuring of the beast that is Enron Corp. Under the Enron big top, restructuring pros can find all the things that make workouts in today's market complicated and slow. One of the challenges in today's restructurings is the emergence of new lenders with different agendas, all fighting for their share of what's left.