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Credit Suisse First Boston and Salomon Smith Barney have wrapped up syndication of the $331.9 million debt package backing Texas Pacific Group's $675 million acquisition of Gate Gourmet, Swissair Group's airline catering business, after ratcheting up pricing. The credit was syndicated amidst a struggling airline sector, and its six-year, $160 million "B" piece saw pricing increase from LIBOR plus 41Ž 2% to LIBOR plus 61Ž 2%, with a 3% LIBOR floor. The original issue discount was also increased from 11Ž 2% to 4%.

Del Monte Food's new deal hit the street running last Monday with $1-5 million pieces of the company's new "B" term loan trading in the 100 5/8 to 100 7/8 range. One dealer said he had completed 30-plus trades in the name by last Wednesday. Another dealer expressed skepticism to the high levels where the bank debt was trading, citing the loan's lack of call protection. Still, relative to where the bonds are trading it is a good deal, he added. Del Monte's new 85Ž 8% senior notes are currently quoted in the 102 1/16 to 1023/8 context.

DRS Technologies has tapped the bank loan market to increase an existing $240 million credit facility by $100 million to back the merger between its wholly owned subsidiary Prince Merger Corp. and Paravant, a defense electronics manufacturer. Increasing the credit was the best and most efficient option to fund the merger, noted Donald Hardman, DRS treasurer. He said a high-yield issuance was always an option, but a company has to weigh whether it is willing to give up cheaper pricing in the bank loan market for longer-term debt. The company is also currently pursuing an equity offering that could provide financing for future acquisitions.

Salomon Smith Barney has sold the notes for Prudential Capital Group's $303.75 million collateralized loan obligation Dryden 2002-3. The deal is the second this year for Ross Smead's leveraged bank loan group at Prudential, which raised debt for the Dryden Leverage Loan CDO in July. The deal is 80-90% composed of leveraged loans, and there is a 10% high-yield bond bucket. Another analyst explained the Triple-A notes for the new deal carry two different spreads, as one tranche has a shorter weighted average life than the other tranche. She added that the Aa2/AA tranche is priced off the swaps curve to accommodate an investor looking for fixed rate rather than floating-rate paper.

Salomon Smith Barney has sold the notes for Prudential Capital Group's $303.75 million collateralized loan obligation Dryden 2002-3. The deal is the second this year for Ross Smead's leveraged bank loan group at Prudential, which raised debt for the Dryden Leveraged Loan CDO in July. The deal is 80-90% composed of leveraged loans and there is a 10% high-yield bond bucket. Another analyst explained the Triple-A notes for the new deal carry two different spreads, as one tranche has a shorter weighted average life than the other tranche. She added that the Aa2/AA tranche is priced off the swaps curve to accommodate an investor looking for fixed rate rather than floating-rate paper. Smead declined comment on the deal.

Deutsche Bank is contemplating starting a fund which would use the firm's own capital and some of its top talent to invest in fixed-income and derivatives instruments, according to a senior official at the firm. The fund has been compared to several others that have lately been popping up at sell-side firms. The model often cited for such funds is UBS Principal Finance, though Credit Lyonnais started a similar fund (BW, 4/14), and Banc of America Securities has also looked at the idea (BW, 5/12). Last Tuesday, the Wall Street Journal credited a similar fund at Goldman Sachs with rescuing the firm's bottom line from a decline in investment banking business by making a series of risky bets.

Lisa Underwood left Société Générale in New York two weeks ago, says an insider. She was head of the collateralized debt obligation origination group. Underwood could not be reached for comment. She reported to Greg Medcraft, managing director and global head of securitization. Medcraft, reached in Australia where he is travelling until mid-January, declined to comment.

Sinclair Broadcast Group does not always produce the number one television station in its market, causing concern for Moody's Investors Service regarding the company's credit risks. "For example, if you had a television station in Baltimore, [Sinclair] may have a number three station," said Christina Padgett, senior credit officer, explaining Sinclair's primarily just-below-the-top rankings throughout its 62 television stations in 39 markets. The ratings service assigned a Ba2 rating to the company's incremental term loan due 2009 on account of this risk, along with other concerns. David Amy, executive v.p. and cfo of Sinclair, responded that the rating is in line with the company's other ratings, however he was unable to comment further on the incremental term loan.

Scotia Capital, Salomon Smith Barney and Bank of America had close to $200 million in commitments for Levi Strauss & Co.'s $400 million "B" piece at press time. The spread on the term loan is set at LIBOR plus 4% and the lead banks have no plans at present to alter pricing, said a banker familiar with the deal. He added that commitments were due by today. The tranche is part of an $800 million refinancing credit for the company launched Dec. 11. Pricing is LIBOR plus 33Ž 4% on the $400 million revolver. Levi Strauss currently has a $1.05 billion facility with the three banks that matures in August of 2003. Credit Suisse First Boston, FleetBoston Financial and J.P. Morgan have committed to the revolver. Scotia and B of A officials declined to comment, while a Salomon official did not return calls.

Jim Galgano retired from Morgan Stanley last Wednesday where he was the head of pass-through trading, according to several MBS officials at the firm. Galgano had spent 24 years in the securities business. A call to his residence seeking comment was not returned by press time last Thursday. Galgano spent the majority of his career at Morgan Stanley, having gotten his start in the industry working in money markets at the Bank of New York. Through mid-2001, Galgano was actively involved trading 30-year conventional pass-throughs, but over the past 18 months, firm officials say he had assumed more of an administrative role. Paul Scialla, the firm's 30-year trader, declined to comment, saying, "we'll need about a week to finalize a decision."

AES Corp.'s revamped loan has popped up roughly 10 points since its balance sheet overhaul was completed two weeks ago. Dealers said $5-10 million pieces of all the tranches changed hands. The company's new "A" loan was quoted in the 94 1/2-95 context. The "B" loan traded between the 91-92 range, and the company's "C" loan moved in the 92-92 1/2 range. Market players said the new security package, the large coupon of LIBOR plus 61Ž 2% across all the tranches and expected asset sales propelled the paper.