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The market was buzzing last week over a plan for Allied Waste Industries that would likely refinance bank debt. In anticipation of the potential move, the company's "B" and "C" tranches have firmed, trading up as high as 99 2/3 to par from 99-99 1/2 earlier this year. Market players are anticipating that a plan in the making could possibly include a $1.5 billion term loan, a new revolver, as well as bond and equity pieces.

Amid its battle for control of WorldCom, MatlinPatterson Asset Management has begun raising capital for a new distressed debt fund--with a target north of $2 billion. The firm has retained the private equity capital-raising firmAtlantic Pacific Capital to raise more than $2.2 billion, said an industry official familiar with the situation. First closing is expected in June, he added.

Maureen D'Alleva has left Morgan Stanley, where she was a v.p. and high-yield analyst covering a variety of sectors including chemicals, paper and forest products and metals and mining, to join New York based hedge fund Angelo, Gordon & Co., as an analyst in the firm's collateralized loan obligation group, according to an analyst with knowledge of the move.

Maureen D'Alleva has left Morgan Stanley, where she was v.p. and high-yield analyst covering a variety of sectors including chemicals, paper and forest products and metals and mining, to join New York-based hedge fund Angelo, Gordon & Co., as an analyst in the firm's collateralized loan obligation group, according to an analyst with knowledge of the move.

Audax Group, a Boston-based alternative asset management firm, is planning to provide senior debt lending for middle-market companies in an effort to fill the gap left by the wave of bank mergers in the last few years. "Sponsors are searching for additional sources of senior debt, primarily due to consolidation among banks providing capital to the middle-market," said Kevin Magid, who heads Audax Group's debt capital markets business and was previously a managing director in the leveraged finance group of CIBC World Markets. "We have a $440 million mezzanine fund and we look forward to adding a senior debt capability."

Aurora Foods bank debt has been stronger this week, with market players quoting the term loan in the 90-91 context up from the high 80s. Reports indicate that the company is getting close to selling off some of its frozen foods businesses. Calls to financial officials at the company were referred to a spokesman, who confirmed that the divestitures are scheduled for the early part of this year but declined to elaborate. Aurora hired J.P. Morgan and Merrill Lynch last summer to aid its divestitures.

Bank of America is in the market with a fully underwritten $235 million credit backing National Bedding Company's acquisition of bankrupt Sleepmaster. The mattress company deal includes a five-and-a-half-year, $100 million senior secured "B" piece priced in the LIBOR plus 33/ 4% area, said a banker. A five-year pro rata portion comprising a $60 million senior secured revolver and a $75 million "A" loan is also included in the debt package. The banker stated that commitments were coming in for the B+/B1 rated facility, but he could not comment on exact levels by press time (see story, page 7). A B of A official declined to comment.

The "B" loan backing Burns Philp & Co.'s planned takeover ofGoodman Fielder is getting a wintry reception from U.S. investors, and the Australian ingredient maker has had to spice up the tranche. The US$375 million "B" piece, backing a US$1.4 billion takover bid, was juiced up from its LIBOR plus 4% level to LIBOR plus 41/ 2%, with lead underwriter Credit Suisse First Boston pumping up incentives to include a 21/ 2% LIBOR floor, 102,101 call protection and a 1% upfront fee--up from 25 basis points previously.

CIBC World Markets last Thursday launched syndication of a $325 million credit backing Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners' ballpark $610 million all cash buyout of DTE Energy's International Transmission Co. (ITC) subsidiary. The fully underwritten credit includes $200 million at the operating company level divided into a $185 million "B" loan and a $15 million revolver. Price talk is in the LIBOR plus 21/ 2% range, said an official familiar with the situation. At the holding company level, there is a $125 million loan priced at LIBOR plus 31/ 2-4%, he added. A Trimaran spokeswoman did not return calls, while KKR and CIBC officials declined comment.

It was another active week for both investment- grade and high-grade primary market corporate issuance. $5.3 billion of investment-grade volume was supplemented by $2.8 billion of high-yield deals and yet the market was able to digest the supply with little problem. In fact, some deals during the week were oversubscribed within minutes of being announced, even after upsizing, and still tightened on the break as the technical bid in the market continued. With a heavy schedule of high-yield deals and little supra/sovereign issuance this week, the weighted average rating of new deals has dropped back to more normalized levels than had been seen in January.

Danske Bank plans to add an originator to its London-based securitization team to ramp up its marketing efforts in Finland and Sweden. Geoff Simms, head of securitization, says one of his goals is to grow the firm's $1.5 billion asset-backed commercial paper conduit this year and to do that, another originator is necessary to aggressively market the firm's services. Danske Bank's speciality is in ABCP.

CRT Capital, a Stamford, Conn.-based junk and distressed bond dealer, has hired three senior professionals who left DrKW-Granchester when that firm sharply scaled back its business in December (BW, 12/15). CRT, which has specialized in distressed securities and busted convertibles, sees the cutbacks by Grantchester as an opportunity to make inroads in the mainstream high-yield market, according to Chris Young and Mike Vaughn, two of CRT's three managing members. The firm plans several mores hires in research, trading and particularly sales, says Young.