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Charter Communications' bank debt sunk a couple of points after the company revised projections for its third quarter results downward. Market players said the paper traded in the 87 context immediately following the news, but it has since been moving in small pieces in the 85 1/2-86 1/2 range. The company had projected that it would see revenue growth of 13.7% in the third quarter, but it subsequently changed the outlook to 13%.

The Colorado Fire & Police Pension Association has allocated $7.5 million to distressed debt and will consider additional commitments to the asset class, according toBill Morris, chief investment officer. The roughly $2.1 billion pension plan investments made its first investment in distressed debt in the early 1990s and decided to jump in again because it made sense given the supply available in the current market. "There have been many defaults over the past year or two, and returns are highly correlated to supply," he noted. "When supply is up, returns are up."

The bank debt of Encompass Services traded at 27 last week, down from the 35 level where traders had quoted the paper two weeks ago. The trade comes as the company announced that it has received a waiver to avoid defaulting on its bank debt due to covenant non-compliance. The waiver, which is secured through Oct. 15, was needed after the company maintained an outstanding amount on its revolver past Sept. 30.

Volatility in Crown Cork & Seal's bank debt has been caused by instability in the equity markets, as the uncertainty of whether the company will be able to complete the spinoff of Constar International grows, traders said. While the bank debt traded at the 87 1/4 level last week, one dealer noted that he had traded the paper in the 90 context the week before.

Credit Suisse First Boston, faced with an end of September deadline, pulled its $210 million credit facility backing Francisco Partners' acquisition of Global eXchange Services (GXS) from the market last week and funded the deal itself. "They probably had no choice, if they wanted to keep the business," a banker watching the deal said. CSFB plans to re-market the credit later this year or early next year, depending on market conditions, another banker said, adding that trading the paper off its desk would be too sloppy. Jean-Jacques Charhon, cfo of GXS, and a spokesman for Francisco Partners did not return calls by press time.

Last week's debt exchange by power company AES Corporation could be the tip of the iceberg as other junk issuers facing near-term debt maturities and a difficult primary market are expected to consider similar deals. The high number of fallen angels with complex capital structures has created an opportunity for more creative exchange offers, says Brendan White, portfolio manager at Fort Washington Investment Advisors.

First Union and Goldman Sachs kicked off syndication of an additional $200 million "B" term loan for Genesis Health Ventures at a bank meeting last Wednesday. The add-on credit, which backs the company's acquisition of NCS HealthCare, will be consolidated with Genesis' existing $285 million "B" piece and its existing $80 million delayed-draw term loan to form a new $565 million institutional tranche, according to one banker. The two banks are seeking approval from existing lenders for the changes and are targeting new investors to commit to the incremental portion of the deal. First Union officials declined to comment, and calls to Goldman were not returned.

Fitch Ratings has entered into a long-term consulting agreement with Gifford Fong Associates (GFA) to develop new rating methodologies for credit structured finance and risk management. The partnership comes in response to the waning credit environment of the last 18 months and as Fitch aims to increase its value and recognition in the ratings market, according to Gloria Aviotti, group managing director at Fitch.

Daiwa SMBC and Deutsche Bank this week set the price range for the flotation of Sohgo Security Services (SOK), the first Japanese IPO in which Deutsche Bank has won a lead position. The ¥1,450-¥1,750 range will be tested in a global bookbuild that will conclude with pricing on October 15 and listing on October 25.

Merrill Lynch last week braved difficult market conditions and underwrote and sold NZ$1.665bn ($779m) of Telecom Corporation of New Zealand shares. The deal, which involves the disposal of shares by a subsidiary of US telecom company Verizon Communications, is the largest secondary share placement ever from Australia or New Zealand.

Philippine conglomerate SM Investments is likely to target a domestic audience with a new $200m five year Reg S issue this week. The company started a roadshow this week and the issue should be launched today (Friday). ABN Amro, Citigroup/ SSB and JP Morgan are joint lead managing the issue. SM Investments is the funding arm of the SM Group, one of the country's best known conglomerates. The only part of the group to have launched a dollar bond before is SM Prime Holdings, the owner of a group of shopping malls. SM Prime issued a $150m 8.625% 5-1/2 year Eurobond in August 1996.

Sydney Airport was forced to delay the pricing of its A$1.5bn multi-tranche issue for a second time this week as investors took advantage of the volatility in global equity markets to demand more generous pricing. Lead managers Barclays Capital, Commonwealth Bank of Australia (CBA), Macquarie Bank and SG Australia first postponed the deal last week, rescheduling launch to today (Friday). However, bankers yesterday told EuroWeek that the leads were struggling to find enough demand for the issue and that the transaction is pencilled in for launch next Tuesday.