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Lehman Brothers has made a number of personnel changes to its high-yield research and trading groups.

Lehman Brothers has placed two of its short-term agency traders, Brian Stocker and Patrick Scheideler, on administrative leave pending the conclusion of an internal investigation involving charges that the two improperly traded bonds with Randy Pitino, an agency broker at Euro Brokers, who was let go. The allegations and investigation were confirmed by several Lehman executives. Central to the allegations is the charge that Stocker and Scheideler improperly gave Pitino trading authority over a large block of notes which they had originally purchased and positioned. Pitino, reached at his home, confirmed that he has been dismissed, but said that the allegations that it was for anything illegal are "totally inaccurate." He says he has never heard of the two Lehman traders. He declined to name his supervisor at Euro Brokers, saying, "I don't think he's there any longer." A Lehman employee said the two traders were not reporting to their desks for the duration of the investigation. Stocker did not respond to a message left at his home; Scheideler was not able to be located for comment. Woody Jay, the head of government and agency bond trading at Lehman, said "I can't comment on this matter right now, on or off the record. It is a highly sensitive issue, being handled internally by compliance." The leaves at Lehman are said to have been enacted in the last week of September, although it could not be learned when the trading activity in question is alleged to have occurred.

The £1.2 billion securitization of future government payments to the infrastructure consortium mandated to upgrade and maintain the London Underground network is set to be priced next month. The Metronet deal is being lead-managed by Deutsche Bank, Royal Bank of Scotland and UBS Warburg and will feature monoline wraps from AMBAC Asset Assurance and Financial Security Assurance, thus garnering a triple-A rating. It will be launched "sooner rather than later," unless some unforeseen legal problems arise, according to a banker involved in the deal. This banker

American Capital Access has hired Laura Schwartz as a managing director responsible for asset-backed securities and mortgage-backed securities, says Cathy Bailey, a spokeswoman at the buy-side firm. Schwartz, who joins from Merrill Lynch, where she was a director in the asset-backed finance group, replaces Ken Mulford, who recently joined Salomon Smith Barney's mortgage finance division (BW, 8/4). She will directly report to Maryam Muessel, coo. ACA is a New York-based insurance company that originates ABS and collateralized debt obligations as well as managing a portfolio of structured finance investments.

Agrilink Foods has secured a new $470 million credit facility as part of a larger recapitalization plan that included a $175 million equity investment by the company's new sponsor, Vestar Capital Partners. According to Earl Powers, cfo, the Rochester, N.Y., frozen-food processing company decided to undertake a recapitalization because it needed more long-term capital in the business for growth. "As a [subsidiary of Pro-Fac Cooperative], we were highly leveraged," Powers said. "[To stay competitive], we needed more capital and more flexibility than our current capital structure would allow."

Moody's Investors Service has downgraded Arrow Electronics' senior unsecured debt rating and its $625 million credit facility from Baa1 to Baa3. The downgrade reflects Moody's expectation that operating performance and debt protection measures will remain under pressure over the intermediate term. Moody's noted that Arrow has had weak earnings in its current six-quarter downturn, and the prospect for revenue growth is limited over the next year because of uncertain global economies and cautious information technology and consumer spending.

Bear Stearns is planning to come to market with a $360 million refinancing forScientific Games. The New York-based maker and operator of wagering equipment and instant lottery systems, formerly known as Autotote, is looking to take advantage of improved ratings in order to achieve better pricing, according to a banker. Moody's Investors Service and Standard & Poor's upgraded the company's ratings to Ba3/BB- in August. Calls to DeWayne Laird, cfo, were not returned by press time.

Hispamer, a subsidiary of Banco Santander Centro Hispano, is preparing a E1 billion debut auto loan securitization. The mandate for the deal was won by J.P. Morgan Securities last week. The deal, which is expected to be the first in a series, should be priced in late November or early December. Arturo Miranda, v.p. securitization at J.P. Morgan, says the deal will be one of the most important to originate from Spain this year because Hispamer is a first-time issuer with an E20 billion pan-European loan book. This deal will be backed solely by Spanish assets.

Levels on the bank debt of former DSL-provider NorthPoint Communications have surged roughly 50 points over the last month on news of a settlement that could slide $175 million to bank debt holders. Pricing for NorthPoint's $40 million term loan jumped from a bid-ask spread of 60 to 62 to a bid-ask spread of 95 to 96 last month, according to LoanX. The paper continued to climb, jumping above par on Sept. 30 to the 106-108 level, and when LMW went to press it was quoted at 108 to 110. The company filed for Chapter 11 in January 2001 and has since moved into Chapter 7 liquidation.

Pension fund and endowment investment in distressed debt during the third quarter cooled somewhat from the torrid pace of the first six months as funds paused to reevaluate the asset class. Last quarter, there were three completed searches resulting in three mandates, according to Loan Market Week andiisearches.com . By comparison, there were eight completed searches resulting in 13 mandates during the first six months of 2002. Furthermore, three searches were postponed or called off entirely over the past three months. But market players expect the distressed debt market to maintain some steam through the fourth quarter, with four large searches currently in progress.

FMC Corporation is in the market with a $300 million "B" term loan, its first ever trip to the institutional arena. The "B" tranche will combine with a $250 million revolver to complete a $550 million facility, central to the chemical company's refinancing plan announced last month. The combination of capacity and flexibility led FMC to access the institutional market, said Eric Norris, director of investor relations at FMC. The company's plans serve to solidify its liquidity position and pay off debt during a downturn in the chemical industry.

Banc of America Securities has released at least two senior investment-grade salesmen and one trader, according to a high-grade executive at the firm. Tim Gordon, a trader, and Lou Russo, a salesman, were both managing directors in the firm's New York office. Gordon was one of the first traders of crossover credits on Wall Street, and already had offers from four or five firms soon after he was let go, say traders at rival firms. Russo was head of sales at B of A earlier in his career. Butch White, a salesman who was based in Charlotte and who had over 20 years experience, was also let go. One other senior person was released from the high-grade group, according to the executive, who declined to name the person. Gordon, White and Russo could not be reached. Calls to Jim Kelligrew, head of investment-grade fixed-income, were referred to Tara Burke, a spokeswoman, who declined to comment.