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Federal-Mogul Corp. bank debt started trading actively after the company announced it has reached an agreement in principle on a reorganization plan. The bank debt was quoted in the 74-76 level up from the high 60s, where it was trading two weeks ago. "People think that there is upside at these levels," noted one dealer.

Investors in Fleming Companies' bank debt are hoping asset sales or even a complete overhaul of the company's Deutsche Bank-led credit will take them out at par. Levels on the existing "B" loan are holding ground, despite news that the company would be terminating its supply contract with its largest customer, Kmart. Traders quoted the "B" paper in the 97 3/4 99 1/4 context due to the lingering possibility that the company's term loan will be taken out within the next three months either through asset sales or through a new asset-based facility. The company has $325 million of term loan outstanding.

GoldenTree Asset Management has made a pair of new hires as it looks to continue growing assets. The firm hired Frank Jordan, a veteran high-yield salesman and the 1998 BondWeek sales executive of the year, to the new position of director of client services, according to a senior high-yield buy-sider with knowledge of the move. He will report to Leon Wagner, chairman of the New York-based firm, which in its three-year history has grown assets to just under $4 billion.

Harris Trust & Savings Bank is leading a $140 million credit backing Racing Champions Ertl's acquisition of Learning Curve International. A banker familiar with the deal could not confirm structural details. The transaction is expected to close by March 15. Following the union of the two Illinois-based toy companies, funded debt to EBITDA figures are expected to be under two times.

New issues were the main focus last week as TRW Automotive priced a $1.58 billion deal. Gaming weakened slightly. Here is other action.

National Bedding Company faces some tough integration risks by acquiring bankrupt Sleepmaster, promptingMoody's Investors Service to slap a B1 rating on the company's $235 million acquisition facility. Kevin Ziets, associate analyst at Moody's, said the company will have its work cut out for it in digesting Sleepmaster. "Any acquisition involves risks, but when the deal more than doubles the size of the company and when the acquired has been preoccupied with Chapter 11 proceedings, the challenges of integration are greater," he noted.

DIRECTV is set to hit the market Thursday with a $1.55 billion credit that includes an $800 million institutional loan. Deutsche Bank and Bank of America are leading the fully underwritten deal, with Credit Suisse First Boston, Citibank and Goldman Sachs on the agent level. The deal was pitched to senior managing agents last Wednesday.

AES Corp.'s bank debt benefited from the sale of Cilcorp--its utility holding company whose largest subsidiary is Central Illinois Light Company--to Ameren Corp. for $1.4 billion. The market for AES' "A" piece climbed into the 97-98 context and the "B" and "C" tranches were said to be trading in the 94-95 1/2 range. AES received roughly $500 million in net equity, $250 million of which was used to pay down the company's bank debt.

Chohung Bank is looking to launch a $250m tier two debt issue to shore up its capital base after making big loan loss provisions in 2002. Citigroup/SSB will be sole bookrunner for the 10 year non-call five deal and also has a mandate for a tier one hybrid sub debt bond for Chohung.

AUSTRALASIA New Zealand

Australia Bank of Queensland (BoQ) this week sold the first domestic securitisation of Australian mortgages in 2003 via Macquarie Debt Markets. The A$400m deal was the 10th under BoQ's REDS programme. Macquarie has a long relationship with BoQ and brought its last deal, also worth A$400m, in August 2002.

The privatisation of China National Foreign Trade Transportation Group, better known as Sinotrans, looks set to be a solid success. Bankers in Hong Kong predict a five to six times oversubscription on the institutional element of the IPO when the books are closed today (Friday) in the US. Sinotrans has been roadshowing the IPO since January 23, with pricing and allocation to be completed by Monday.