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Banco Espirito Santo's debut residential mortgage-backed securitization will hit the market next week, says Adrian Carr, head of syndication at Credit Suisse First Boston, one of the lead managers. Called Lusitano, the E1 billion deal, will be roadshowed this week, says Carr. Deutsche Bank is also a lead manager on the deal.

Sal Abbatiello has resigned from his position as head high-yield trader at RBC Capital Markets to start a new dealer firm with a former colleague trading distressed, high-yield and crossover securities. Abbatiello says cutbacks at other firms have created an opportunity to snap up a lot of veteran high-yield talent. The firm, called Libertas Partners, has five employees so far, but plans to hire 15 more people by the second quarter of next year. Abbatiello, the coo and president, will focus on sales, while Gary Katcher, who resigned from RBC as head trader last year (BW, 4/15/01), is the ceo, and will oversee the firm's trading business. Based in Greenwich, Conn., Libertas will focus exclusively on sales and trading, though Abbatiello says that if they find an investment banker with good client contacts, underwriting could be a possibility.

RCI Banque, the captive auto loan provider for Renault, plans to securitize part of its German auto loan book, says Veronique Dosdat, head of banking relationships and structured finance at RCI. The deal will not happen until next year and the bank aims to bring one E1 billion deal to market per year each year going forward and will use German assets in 2003, because, after France, Germany is Renault's largest market. Last month, RCI Banque brought its first auto loan asset-backed securitization, a E1.4 billion deal, backed by French receivables.

R.H. Donnelley's $1.6 billion credit facility backing the acquisition of the Sprint Publishing Assets (SPA) is bolstered by the directory business' trademark as collateral for the bank debt. "What's valuable about the acquisition is the trademark," noted Moody's Investors Service senior credit officer Christina Padgett. Moody's has assigned the credit a Ba3 rating. The Sprint trademark will be contributed to a bankruptcy remote Special Purpose Vehicle and if a different carrier were to purchase any Sprint assets, the buyer would assume Sprint's obligations with respect to R.H. Donnelley. "You want to make sure that you have access to that trademark," said Padgett.

TD Securities and Credit Suisse First Boston have filled the "B" piece for Tucson Electric Power and then some, with close to $400 million in commitments, said a banker familiar with the deal. The $200 million "B" loan closed late last Wednesday, while the rest of the pro rata -- a $60 million revolver and $140 million "A" term loan -- are set to close this week. TD and CSFB are waiting on a couple more commitments, he said. Pricing was flexed up a hefty 2% on the "B" tranche to LIBOR plus 51/ 2%, while the deal was sold with a 1% upfront fee. Pro rata pricing increased 1% to LIBOR plus 4%, he noted. Additionally, the banks threw in six-month call protection at 101, a buysider said. Bankers at TD and CSFB declined to comment and officials at Tucson did not return calls.

Tesoro Petroleum ticked up with small trades in the 89-91 context after the company was able to capitalize on the decreasing cost of crude oil. "Crack spreads have improved dramatically over the last month," one trader noted, adding the improvement would have a huge impact on the company's EBITDA.

Peter O'Malley has left his position as a director in the debt capital markets department at Credit Suisse First Boston, according to a person familiar with the situation. He did not return a call to his home, and neither his reason for leaving nor his future plans could be determined. Peter Milhaupt, CSFB's head of U.S. debt capital markets, would not comment on whether O'Malley had been let go.

High-yield portfolio managers and at least one strategist remain wary of adding risk despite a continued rally at the lowest rungs of the credit ladder, as money managers look for someplace to invest the cash that had been sitting on the sidelines before year-end. Through the five-week period that ended Nov. 14, distressed credits have returned a whopping 13.48%, versus 6.27% for all of high-yield, according to data provided by Bear Stearns. Wireline telecom, one of the most beaten up sectors over the last two years, returned 22% over that period, following large gains in WorldCom and Qwest Communications.

Some $30 million of AES Corp. paper was said to have traded in the 81-82 context last week, with market players saying the paper changed hands because of fears that a refinancing will not be completed. The paper has trickled down from the 84-87 range, where it was trading in early October following the refinancing announcement. "It would make sense that people would want to get out from under this thing," said Jon Kyle Cartwright, a fixed income analyst with Raymond James & Associates. "The credit markets should be closed to AES. The industry as a whole is having trouble getting financing." Repeated calls to Barry Sharp, cfo, and Sandra Ross, a company spokeswoman, were not returned by press time.

The ratings of Midwestern food wholesale company Nash Finch have been placed on "rating watch negative" by Fitch Ratings after the company announced it is under an informal inquiry by the Securities and Exchange Commission and has postponed third quarter earnings results. The ratings include the BB bank credit facility and the B+ senior subordinated debt, affecting $380 million of debt. The SEC is investigating practices and procedures relating to certain promotional allowances provided to the company by its vendors that reduce the cost of goods sold, according to Fitch.

Morgan Stanley is preparing a E300 million commercial mortgage-backed securitization of a single property in Paris, according to London-based bankers. The deal, ELOC12, will securitize Paris' largest office complex called Zeus. Calls to Steve White, co-head of European securitization at Morgan Stanley in London, were not returned.

J.P. Morgan, Goldman Sachs and UBS Warburg have thrown in a bunch of investor-friendly concessions on the bank deal backing the buyout of National Waterworks, including a funky yield protection clause. The feature has been introduced into the documentation so if a new add-on is attempted, the yield has to be within a similar range as the existing loan, explained a banker. The spread can be 25 basis points wide, but this prevents the old loan from trading down if a richer priced add-on credit is introduced, he added.