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Genesee & Wyoming is boosting its borrowing capacity in anticipation of future acquisitions and has tapped Fleet National Bank for a new $250 million credit. "We are an acquisition-driven company, and it's important to have debt capacity because of cash deals," said Jack Hellmann, cfo. The railroad operator recently announced plans to acquire Utah Railway, a division of Mueller Industries, for $54 million in cash drawn from an existing $103 million revolver, but Hellmann declined to disclose any information related to future acquisitions.

Georgia Gulf has eased its covenant ratios to allow itself greater flexibility during an uncertain economy. "As we look forward, we are uncertain as to the speed of the [economic] recovery," said Richard Marchese, cfo. Marchese noted that the current market environment was responsible for the timing and completion of the amendment.

Kmart's bank debt regained some ground last week, with a trade occurring at about the 40 level. The paper had sunk more than 20 points to the mid-30s two weeks ago after the company filed a motion to amend its debtor-in-possession facility, including the request for an additional $500 million of availability and relaxed covenants. The company has since sought to clarify the market's misunderstanding of its cash-burn rate and its funding needs (LMW, 8/19).

Lyondell Chemical's term loan "E" dipped below par last week, trading as low as 98 1/2 before ticking back up to the 99 level on Thursday. Dealers said the name had traded in small pieces south of par because of general concerns with the chemical sector. "Chemical companies are taking a beating," one trader said, noting that rising prices for crude oil and raw materials were causing some of the pressure.

A bankruptcy court judge approved Adelphia Communications' $1.5 billion debtor-in-possession financing plan last Thursday, and traders said the bank debt would be better bid as a result of the approval. The new financing has a provision that allowed the banks on the company's existing facilities to receive $300 million in interest payments. The company's unsecured lenders tried to block the interest payments on the basis that the banks had constructed the loans to the Rigas family that sparked Adelphia's collapse.

Aladdin Capital Management's second collateralized loan obligation, Landmark II, is pricing this week via Banc of America Securities and Mizuho Bank. The 10-year, $250 million vehicle was downsized from $400 million due to a scarcity of quality assets in the market, according to an official familiar with the CLO. "It has definitely been a turbulent market," he said. Gilles Marchand, senior portfolio manager for Aladdin, declined to comment on the vehicle, which is set to close in mid-September.

Bank of America, J.P. Morgan, UBS Warburg and Morgan Stanley are taking a wait-and-see approach to pricing on Del Monte Foods' $1.6 billion bank deal, which is scheduled to be launched on Sept. 6. Pricing initially was expected to be LIBOR plus 21/ 2% and LIBOR plus 23/ 4% for the pro-rata and "B" piece, respectively, but this is now on ice as market conditions are evaluated, one banker said. Pricing is likely to rise to 23/ 4-3% over LIBOR to reflect the tougher market, he noted. UBS bankers declined to comment, and officials at the other three banks did not return calls.

Charter Communications' bank debt took a five- to seven-point hit last week after the company revealed that it received a grand jury subpoena from the U.S. district attorney's office for the Eastern District of Missouri. Following the news, small pieces of the name were said to have traded hands in the 80 1/2 - 82 3/4 range. The paper settled in at the 83 level by week's end.

Deutsche Bank continues to push through the exit financing for Dade Behring. In an effort to get the financing done, the bank has increased pricing on the $450 million "B" term loan by 75 basis points. A source said the credit, which includes a $125 million revolver, has been affected by a "pretty dramatic swing" in the market away from issuers and in favor of investors. Pricing on the "B" piece now rests at LIBOR plus 41/ 4%. A Deutsche Bank official declined to comment.

Qwest Communications International rallied from the 58-62 level last week after the company announced that it had completed the sale of its directories business, known as QwestDex. Traders quoted the company's bank debt anywhere from the mid-70s to the mid-80s earlier in the week, and trades were rumored to have been completed in the 80-82 range by week's end.

Prices for credit protection on Malaysia have fallen and volumes rocketed after Standard & Poor's upgraded the sovereign. Malaysian credit protection traded five to six times around the announcement on Tuesday, in comparison to a typical week where Malaysia trades about once a day. "Quite a number of trades went through," added a trader at Salomon Smith Barney.

BNP Paribas and Barclays Capital say the medium-term swap rate is overvalued and recommend investors take long and short exposure to take advantage. BNP is pitching a butterfly trade, which is where an investor would either purchase or sell swaptions in the middle portion of the curve and then do the opposite in the outer ends, or wings, of the curve. Barclays is also recommending a butterfly trade, specifically one executed with a straddle structure.