Search results for

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.

WorldCom's bank debt clamored upwards alongside of bond prices on reports that Rudy Giuliani has joined on with David Matlin of Matlin Patterson Asset Management to raise $1 billion to purchase WorldCom bonds. Several small pieces of WorldCom's bank debt traded in the 24-25 context last week as traditional distressed players looked to buy into the paper. The paper traded two weeks ago in the 22 1/2 23 1/2 range. The names of the players could not be determined. Calls to WorldCom and Matlin were not returned by press time. Attorneys at Weil, Gotshal & Manges, the firm representing WorldCom, also could not be reached by press time.

The market for Encompass Services bank debt tumbled from the 30s into the 15-20 range immediately after the company filed for bankruptcy last Tuesday, but recovered somewhat with bids in the 20s after rumors that bank debt holders were looking to liquidate the company were quashed. No bank debt paper was seen trading last week. "Liquidation in the traditional sense of the word was not coming off of anyone's lips," said Michael Gries, chief restructuring officer for Encompass.

Fitch Ratings is keeping an eye on the notes of Structured Enhanced Return Vehicle Trust, series 1999-4 (SERVES 1999-4), a synthetic collateralized loan obligation managed by Conseco Capital Management through Bank of America's balance sheet, after the BBB notes were downgraded. The $95 million BBB notes have been downgraded by Fitch to BBB- after SERVES 1999-4 suffered defaults and trading losses. "The default rate has been higher, the recovery rate lower and the excess spread is a little less than expected," said Fitch Director Michael Gerity.

FleetBoston Financial has hired Joseph Mackiewicz as managing director and head of asset securitization. He joins from Citigroup where he was a managing director in the global securitized markets group. Calls to Mackiewicz were referred to Alison Gibbs, a spokeswoman with the Boston-based bank. Gibbs says the position is a newly created one.

A sell-side analyst and an investor have concerns about the high leverage and asbestos-related woes of Washington State-based Weyerhauser Co., a diversified forest products manufacturer, but disagree on how to add exposure in the sector.

FrontPoint Partners is marketing a distressed debt fund that will focus exclusively on debt in Canada.Philip Duff, partner and chairman, said the fund has no interest in the U.S. market and is instead looking to fish out some distressed gems among the $100-200 billion in distressed assets north of the border. "It's very rare that you see a dedicated pool of capital [and] investment strategy that's exclusively focused on Canada," he conceded. But he affirmed that the fund was not "about to go fishing in a pond where there aren't any fish."