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London-based Jupiter Asset Management, which manages £300 million in fixed-income, is waiting for signs of stability in the equity markets and an economic rebound before extending its risk profile. John Hamilton, head of the fixed-interest funds, says he is keeping his eyes open for better corporate earnings and improved economic data before going more wholeheartedly into single-As and triple-Bs. "The market itself can be a lead indicator--when the spread between governments and triple-A corporates gets too tight, that could indicate the market as a whole has become much too risk-averse and too expensive to justify holding," he says. "Those are the kinds of signs I'm looking for. The trick is seeing them earlier than other people," he adds.

The primary market was back in force last week with over $10 billion of new deals launched as issuers across the credit spectrum took advantage of the ever-decreasing level of rates. Demand for the new deals was strong though near-term indigestion caused a weakening in secondary market spreads. Close to $1 billion of the volume was high-yield including the successful relaunch of a deal that was pulled in July. Risk appetite and demand for junk bonds is rising despite the continued poor returns in the sector. Bolstered by the number of $1 billion plus deals, the average deal size has jumped substantially in recent weeks and at $600 million is more than twice that seen during the July primary market freeze. Weighted average rating remains in the single-A range and the weighted average maturity at nine years is trending toward the low end of the year's range.

Approximately $10 million of Viasystems Group's bank debt traded last week in the mid 60s. The company recently filed a proposed plan of reorganization that is intended to be a prepackaged-bankruptcy plan. The company has not yet filed for Chapter 11. In the plan, as stated in Viasystems' September 8-K, the existing bank debt would be reduced by roughly $77.43 million with proceeds from the sale of senior convertible preferred stock and common stock. It would then be restructured into a new senior credit agreement that would include a $69.5 million to $85.4 million "A" term loan and a $362.9 million to $378.8 million "B" term loan. Officials at the company could not be reached by press time.

Clean Harbors is planning to refinance approximately $155 million of term loans within the next year, after accumulating highly priced debt to finance the acquisition of Safety-Kleen Corp.'s chemical services division for $34.3 million and the assumption of $265 million in environmental liabilities. The debt carries a heavy interest spread because the financing commitment for the acquisition had to be in place within a short time frame, explained Steven Moynihan, senior v.p., planning and development for Clean Harbors, a provider of hazardous waste services based in Braintree, Mass.

Moody's Investors Service downgraded the ratings of MAGNATRAX's $268 million senior secured credit facility from Ba3 to B3 after its subsidiary, Vicwest, was forced to miss a Sept. 10 interest payment on its subordinated notes. There are cross default clauses, noted Joseph Snider, Moody's analyst. Vicwest's banks, which include CIBC World Markets as lead lender, would not permit the interest payment as the company is in negotiations to amend covenants that it had breached. The precise covenants involved could not be determined.

Credit Suisse Securities Ltd., the European broker/dealer arm of Credit Suisse Group, is looking to add selectively to its London fixed-income sales team. Roger Jones, sales manager, says the firm is looking to expand and develop its German- and French-speaking institutional client base and, accordingly, is looking for experienced fixed-income salespeople with the appropriate language skills. The London group specializes in credit products and is made up of roughly 35 people.

Credit Suisse First Boston and Salomon Smith Barney are in the market with a new seven-and-a-half year, $210 million "C" loan for Terex. The loan is priced at LIBOR plus 21/ 2% and backs the company's $270 million acquisition of Genie Holdings. The incremental tranche was launched by CSFB and Salomon on Sept. 17, according to Kevin O'Reilly, v.p. of investor relations for Terex. In addition to the loan, which is rated Ba3, $65 million in Terex common stock will be used to cover the Genie transaction, with Westport, Conn.-based Terex assuming $195 million of Genie's debt.

Market players said more than $50 million of Enron's bank debt has been trading in the last two weeks, with the paper changing hands up a point or two from where it has sat for months. Traders noted pieces trading as high as 13131/ 2, but no one could determine what had caused the recent boost. "On the horizon is the [bankruptcy court appointed] examiner's initial report," a company spokesman said, but noted that he did not think that would cause the recent activity.

Dresser plans to pay down approximately $23 million of its eight-year, $455 million "B" term loan by the end of the month. The company will pay down $30 million as part of a debt reduction strategy to combat the economic slump, said James Nattier, cfo. "Currently, in the depressed economic environment our focus is on repaying debt," Nattier noted. The reduction will be funded with cash on the company's balance sheet. The "B" piece has no call protection.

Dominion Resources will hold an invitation-only, one-and-a-half-day conference exclusively for fixed-income analysts and investors in its hometown of Reston, Va. in November, says Scott Hetzer, senior v.p. and Treasurer. Utility analysts say it is highly unusual for an issuer to devote so much time to the fixed-income community. One assumed that the meeting is an attempt to mend fences with fixed-income investors. Dominion lowered earnings guidance just a few days after issuing its 5.7% notes of '12 on Sept. 9. Dominion included a last minute step-up coupon to compensate investors in the event of a possible ratings downgrade, which caused spreads to snap back after some initial widening. The analyst's other, admittedly "cynical" explanation for the meeting was that keeping equity investors away would allow the company to pacify bond investors without alienating the equity side.

Technology was the big loser through last Thursday, though weakness was widespread following the equity slump. Allied Waste softened ahead of new issuance.Fleming andHealthSouth saw heavy selling yet again. Here is other selected action.

A high-yield portfolio manager and a lodging analyst are divided on the high-yield lodging sector. Tom O'Reilly, analyst and portfolio manager at Lincoln Capital Management in Chicago, Ill., says lodging is trading too rich for industry fundamentals. Lincoln upgraded its lodging portfolio earlier this year, and O'Reilly says even the highly rated names the firm has added are beginning to look like possible candidates for sale. Lincoln's Starwood Hotels & Resorts 7.875% notes of '12 (Ba1/BBB-) had moved up to 99 last Monday and the John Q. Hammons Hotels 8.875% notes of '12 (B2/B) were at 97. O'Reilly says he would sell both issues at par. "Most of the upside is already priced in," he says.