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Wachovia Securities has priced the notes for Guggenheim Investment Management's debut collateralized loan obligation, using a credit swap system rarely employed in cash-flow arbitrage deals. The $448 million deal, called 1888 Fund, uses a proprietary Wachovia structure called APEX, which protects the fund against par erosion due to defaults as well as distressed sales of credit-risk securities through the use of the APEX credit swap, stated Belinda Ghetti, a credit analyst with Standard & Poor's. Wachovia bankers and Todd Boehly, a portfolio manager at Guggenheim, declined comment, as the transaction had not closed as LMW went to press.

BNP Paribas has made a number of appointments in its credit businesses in the Americas, according to an internal memo obtained by BondWeek. The appointments are part of a global reorganization the firm announced earlier this month integrating its derivatives, high-yield, high-grade and emerging markets businesses. David Fergione, who ran the high-grade business, has left the firm, according to a senior firm official. Fergione's departure was not mentioned in the memo and he did not return a call to his residence. However, Fergione has signed up for a free subscription to Bloomberg with the tag line: "Jerry Springer is really quality T.V. Go Birds!," according to one market observer, who added, "He may be on the payroll, but it sure sounds like he's spending his days at home to me."

United Rentals bank debt has been creeping up to the 99 range since the company announced that it was pursuing an additional $210 million in 103Ž 4% senior notes it recently issued. Traders said the bank debt traded in the 99-99 1/2 context last week. The paper was priced in the 97 5/8 98 5/8 range prior to the announcement of the bond issue on Dec. 10, according to LoanX. Roughly $100 million of the proceeds from the high-yield add-on will pay down a portion of the company's term loan, and the remaining amount is to be used for a repayment of the outstanding amount of the company's revolver. Calls to John Milne, cfo, were not returned by press time.

Columbus McKinnon refinanced its existing $150 million senior secured credit facility in creative fashion by obtaining a new $100 million senior secured line and a $70 million second lien secured term loan in a separate transaction. The Fleet Capital-led senior debt provided the amount the company was able to borrow from the bank according to its assets, while the second lien loan made up for the additional desired capacity, said Robert Montgomery, executive v.p. and cfo. "We needed another portion to sit below the [$100 million piece of] debt," he said.

The supply pipeline seems to be finally winding down recently, but volumes have continued be surprisingly robust and the market has resisted the temptation to close the books early on what has been a most difficult year. Investment-grade issuance for December has now hit our full month expectation, totaling $27 billion. However, it has been in the high-yield arena that the recent months have contrasted most strongly with the dearth of deals that came to market in Q3. There was a full $5 billion of high-yield issuance in the latest week, nearly equaling the $5.6 billion of investment-grade deals. This is a notable change from November when there was a strong dominance of supra, sovereign and other highly rated deals and indicates just how much of a rebound there has been in risk appetite. This can be seen in our moving average of the weighted average rating of deals issued, which has now dropped to the lowest level we have seen in 2002. With the holidays now upon us, volumes are likely to be depressed to year-end. And although the healthy state of the primary market in November and December augurs well for the New Year, the potential for escalation of the conflict with Iraq is sure to prove disruptive to markets and likely to cause another of the sudden drops in debt issuance that were seen frequently in 2002.

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.