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Advantus Capital Management is looking to swap some $60 million in corporate issues in a bid to add incremental yield. Wayne Schmidt, portfolio manager of a $1.2 billion taxable bond portfolio, says the firm is looking to make roughly six $10 million trades out of issues that have performed well in recent months and trade inside 100 basis points over Treasuries, and into credits that the market perceives as riskier. The firm has thus far had an easier time identifying credits to trade out of that ones it wants to buy, however. Candidates for sale include the Colgate-Palmolive 5.98% notes of '12 (Aa3/AA-), an issue that came in April at 78 basis points over Treasuries. Pricing on the issue was difficult to determine last Monday, but Schmidt believes it should sell in the mid- to low-60s. Another solid performer Advantus may sell is the Gannett Company 5.5% notes of '07 (A2/A). It was trading at 76 basis points over the curve last Tuesday.

Greg Sweeney, portfolio manager at Northern Trust Management, says he will add $15 million, or 5% of the firm's portfolio, to short-term adjustable-rate mortgage-backed securities. He will finance the purchases with new money coming from bond redemptions. He says he is making the move to collect more yield while staying on the shorter end of the curve, a strategy that limits loss of principal. He says he is positioning his portfolio for the next 12-18 months for a backup in rates. He reasons that the Treasury rally is bound to end once the economy begins to recover.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Tesoro Petroleum is negotiating an amendment to its credit agreement that would push out all existing EBITDA-based covenants until Sept. 30, 2003, and replace them with minimum EBITDA and maximum capital expenditure covenants, said Sharon Layman, Tesoro v.p. and treasurer. As the company tries to work out the amendment, its bank debt has been dropping steadily in secondary trading from the low 90s to 84-851/ 2. Layman declined to comment further, citing the ongoing negotiations. But market players said the coupon on the "B" piece is likely to be raised to LIBOR plus 41/ 2% and the amendment fee is 3/8%.

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.