Search results for

Everyone likes Star Kist, but buysiders were groaning after a mammoth two-and-a half- hour conference call explaining the Del Monte acquisition and debt plans. "It was tough," said one buysider.

Kevin Dachille, portfolio manager at Mercantile Capital Advisors, will swap 5% of the firm's portfolio or $7 million, from mortgage-backed securities into corporates when the yield curve begins to flatten. The trigger for the move will be when the spread between the two-year Treasury and the 30-year long bond tightens to 50 basis points. Last Monday, the spread stood at 300. The flattening indicate speeds which is not a favorable environment for MBS performance, he says. In this flatter yield curve context corporates should outperform MBS.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Société Générale Asset Management will sell the rest of the conventional bonds in its £500 million fixed-income portfolio, and buy index-linked paper. Paul Rayner, head of U.K. bonds in London, says, increased government and corporate issuance in general, especially on the long-end, will put pressure on yields. Rayner foresees inflation creeping up, which will prompt him to sell conventional gilts and buy index-linked gilts--both corporate and government. He expects to make the move next year. Currently, SGAM allocates 90% of its portfolio to government and index-linked bonds and the balance to corporate credit.

Piedmont Capital Management is seeking to capture gains in its Household International 6.5% notes of '06 and 6.47% notes of '08. The bonds rallied from 92 to par after HSBC Holdings reached an agreement to purchase Household. Piedmont owns just under $1 million of Household bonds, and will sell them if it receives a bid of 100.5 or 101, says Walter Campbell, portfolio manager of $100 million in taxable fixed-income.

The New York-based high-grade fixed-income team of OppenheimerFunds will relocate to Boston in the first quarter, says Ben Gord, a mortgage-backed securities portfolio manager. Gord, as well as Angelo Manioudakis, head of the investment-grade team and to whom Gord reports, are part of the 10-15 staffers scheduled for the relocation. Others include Bob Behal, asset-backed securities portfolio manager, and Chuck Moon, investment-grade corporate portfolio manager. Manioudakis' team overseas high-grade corporates, agencies, Treasuries, ABS and MBS.

Rexnord Corp's bank debt broke into the secondary market last week, trading between 100 1/4 100 1/2. One trader estimated that a total of $20 million was flipped in the days immediately following the break. By week's end the name grew quiet. Dealers said the paper was being bought by investors who were cut back on allocation as the seven-year, $360 million "B" piece was more than 50% oversubscribed.

A pair of sell-side paper industry analysts say spreads could still widen on bonds of newsprint manufacturing companies even though they tightened following last week's downgrades by Moody's Investors Service of the top two North American producers, Bowater Inc. and Abitibi-Consolidated. Mark Altherr, analyst at Credit Suisse First Boston, remains cautious on the names even though both high-yield and high-grade credits have been improving in recent weeks. "It's hard to go against the flow, but I see no near-term support for credit improvement in these names. If spreads in general come under pressure, these will come under a lot of pressure," he says.

Guido Lombardo, a managing director at Morgan Stanley, has moved to Rome to join the Italian banking team, which handles corporate finance relationship management, says a firm spokesman. He now reports to Ricardo Pavoncelli, head of Italian investment banking. Lombardo will retain his Italian securitization clients.

Tyco International's $2 billion, five-year revolver with February '06 maturity traded in the 90 context early last week. Its February '03 bank debt was quoted in the 97-97 3/4 context and traders said the paper has been creeping closer to par as the expiration date approaches. The February '03 bank debt was a $3.855 billion, 364-day revolver that was termed out in February this year.

Vitamin Shoppe Industries faces the challenge of maintaining quality staffing and real estate, as well as intense competition in its vitamin, mineral and nutritional supplement retail market, according to Moody's Investors Service. The retail chain has grown to 116 stores over the past 25 years, and plans on opening 30-50 more stores a year, said Moody's analyst Richard Baldwin. "Can they find the managers and find the real estate?" he asked, explaining Moody's concern over these future tasks. He also commented on the congested market. "Every drugstore, and every Wal-Mart, and every supermarket sells [Vitamin Shoppe's type of product]" Moody's has rated the company's $125 million bank facility at B1, while its unsecured issuer rating is set at B2.

WCI Communities has closed on a secured $187 million construction term loan with Wachovia Bank, giving the home and residence building company enough cash to complete the building of two high-rise luxury residential towers, stated Steven Adelman, senior v.p. and treasurer. "This is the largest construction loan we've ever done," he said. "We had a very good reception," he added, commenting on the reaction from the syndicated loan market. He said that the line launched and closed in under three months.