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Trapeza Funding, a joint venture between Cincinnati-based Financial Stocks and Philadelphia-based Resource America, is originating its first ever collateralized debt obligation in a $300 million trust-preferred deal set to close November 19, according to a CDO market official. Neither money manager has issued a CDO before, says this market official. But, because both buy-side firms specialize in investing in small financial institutions and banks, they are said to have the required bank relationships to manage the trust-preferred assets that back the deal. Trust-preferred securities are issued by trusts that are wholly owned subsidiaries of banks. From a regulatory perspective, they allow banks to raise tier one capital. Credit Suise First Boston is the underwriter for the deal, which marks its entrance into the trust-preferred securities CDO market. Chris Ricciardi, head of structured credit products at CSFB, did not return calls. Philip Schultz, senior v.p. at Financial Stocks, did not return calls. Steven Kessler, cfo at Resource America, says that the deal marks "an opportunity to work with our bank partners" as small-size banks get a cost efficient source of funding in pooling together these trust preferred securities via a CDO.

MacKay Shields Financial is seeking to raise $500 million for its long/short high-yield bond fund--a rare type of hedge fund that the firm launched September 1, according to BW sister publication Foundations and Endownment Money Management. "The environment is perfect for long/short funds because they are able to generate yield in a tough market," said Robert Nisi, managing director at MacKay Shields, which is seeking to raise assets from both domestic and international investors--especially foundations and endowments--by the fourth quarter of next year. Currently, the fund has raised slightly more than $75 million. The firm is targeting the non-profits through existing relationships and consultant contacts, and is seeking to take advantage of the high tolerance for risk and increased interest in alternative investments by non-profit funds. The funds are managed by Don Morgan, the firm's lead high-yield bond portfolio manager.

Stanfield Capital Partners is seeking to put together a new $300 million collateralized loan obligation called Carrera CLO, joining a growing list of managers in the pipeline attempting to complete two deals in quick succession. The arbitrage cash-flow vehicle is being marketed and underwritten by Lehman Brothers and is still in the early stages of raising debt, said a banker familiar with the transaction. Officials at Stanfield and Lehman declined comment on the CLO.

RMF Investment Group, a Swiss asset management firm specializing in alternative investment strategies, is ramping up collateral for its debut E300 million collateralized debt obligation, RMF Euro CDO. The collateral will be predominantly European leveraged loans, with a 10-30% bucket for high-yield bonds and up to 10% for synthetics. The aim is to focus on European collateral, but the CDO does has a carve-out for non-Euro denominated assets, including U.S. dollar and British sterling loans. "This transaction is the first one RMF has done actively managing the underlying collateral in a discretionary way," said Mark Mink, RMF portfolio manager.

RMF Investment Group, a Swiss asset management firm specializing in alternative investment strategies, is ramping up collateral for its debut E300 million collateralized debt obligation, RMF Euro CDO, according to BW sister publication Loan Market Week. The collateral will be predominantly European leveraged loans, with a 10-30% bucket for high-yield bonds and up to 10% for synthetics.

Weaker-than-expected third quarter operating results have prompted Moody's Investors Service to review Terex for possible downgrade. The review of the company's $985 million Ba3-rated bank facility reflects the continuing weak demand for construction and mining equipment in the struggling market. "The market demand [for construction, infrastructure and mining equipment] is deteriorating," explained Charles Tan, senior analyst at Moody's. The agency has further uncertainties about the equipment manufacturer's performance outlook for the intermediate term. "There's not much visibility out there," Tan noted.

Time Warner Telecom has amended its $1 billion secured credit facility by reducing the line by 20% to cut excess capacity in exchange for relaxed covenants. David Rayner, senior v.p. and cfo, said the company did not see a reason to pay commitment fees on funding it was never going to need. The line was implemented in 2000 to refinance a $700 million bridge loan for the GST Telecommunications acquisition. But the credit was expanded beyond what the company ended up needing, he explained. "I didn't need the whole billion," Rayner said.

Leads Scotia Capital, CIBC World Markets and Credit Suisse First Boston have set pricing and launched syndication of the credit for Bell Actimedia. The success of Dex Media East augurs well for the transaction, said one buysider. However, he said there are differences between the transactions. "Actimedia has slightly higher senior leverage at 4.5 times," he noted. He also said being in Canada provides certain tax benefits. "All-in-all, this should price at least a little below Dex," he said. Dex was sold at 99 with a LIBOR plus 4% spread, though it broke above par after allocation.

An asset-backed securitization of equipment leases out of South Africa is currently being touted in a road show to investors and is scheduled to be priced within the next few weeks, say ABS officials. J.P. Morgan Securities is the lead manager on the R630 million deal, called Fintech. This is J.P. Morgan's first South African ABS deal, although the market is still in its developing stages--only R5.5 billion in South African ABS deals have been issued to date. Fintech will be the fifth deal originated in South Africa and the second this year.

Merrill Lynch and Credit Suisse First Boston are holding a bank meeting today to launch NDCHealth's new $200 million senior secured credit facility and $175 million 10-year senior subordinated notes offering, said a banker. The bank facility comprises a five-year, $75 million revolver and a $125 million, six-year "B" term loan. The revolver is priced at LIBOR plus 3%, while the "B" piece has an out-of-the-box spread of LIBOR plus 31/2 %. The commitment fee is 1/2% and the credit is rated BB/Ba3.

Merrill Lynch has released Barbara Scholl from her position as managing director and head of distressed fixed-income research, according to officials at the firm. She did not respond to messages left at her office and her residence. The officials say Scholl's work was mainly on behalf of a proprietary trading effort at Merrill. One of the officials, and another member of the distressed community, expressed surprise that Scholl was let go, as her group was believed to be profitable. Graham Goldsmith, head of the firm's distressed business, referred calls to a firm spokesperson, who did not respond by press time last Thursday.

Nextel Communications' bank debt could be on the cusp of cracking 90 in the near future, as both the bonds and bank debt continue to climb. One trader said a $5 million piece was traded at 89 1/2, but this could not be confirmed and he declined to name the participants. He attributed the bank debt's climb to the recent strong earnings announcement and the strength of the bonds. Over the week the bond price increased from 82 5/8 to 85 1/4 at press time, 20 points higher than in June.