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Standard & Poor's has downgraded Dynegy from BBB- to BB due to concern over the erosion in the company's core merchant energy business. Waning incremental cash flow, hurt by decreased market opportunities and lower power prices, has led to weakened credit protection measures more commonly associated with double-B credits.

TELUS, a Canadian phone corporation, saw its U.S. dollar-denominated 7.5% notes of '07 and 8% notes of '11 drop from 63 to 47 after a ratings downgrade to junk from Moody's Investors Service. One buy-side junk analyst blames the steep drop on forced selling pressure from investment-grade money managers.

Just weeks after securing a new $200 million term loan, TEPPCO Partners has used $90 million in proceeds from an equity offering to reduce the term loan by an equal amount. Charles Leonard, cfo, said the Houston pipeline operator initially needed the larger term loan to close its acquisition of Val Verde Gathering System before the end of June. In addition, TEPPCO needed time to file the appropriate financial statements and meet Securities and Exchange Commission requirements for the equity offering, he explained.

Warnaco has seen a lot of action in the secondary market over the last two weeks with more than $60 million changing hands, according to dealers. The name has been trading flat at the 30-32 level. Traders said better company performance has caused the recent activity in the name. Market sources also said the ultimate recovery value for the bank debt is deemed to be as high as 40.

The corporate primary issuance market has ground to a virtual halt with just $2 billion of investment grade deals coming to market in the last week and $300 million of high yield deals. The month-to-date total volume for July is a mere $14 billion, a level which is less than half the monthly pace of the last two years and demonstrates the degree to which the debt market has shut down. With volume so light it is difficult to discern meaningful trends in the ratings and maturities data, other than to observe that although there is still some diversity in the actual ratings of the deals that are coming to market, the increasing number of deals that are being pulled given lack of investor appetite paints a picture of an extremely dysfunctional market.

SG Asia Credit Securities this week launched Thailand's first publicly rated securitisation of distressed assets. The deal is a Bt7bn ($170.4m) domestic issue securitising loans from two mortgage funds owned by Lehman Brothers. The Thai private banking market is struggling under the weight of around Bt3bn of non-performing loans, which represents around 20% of the total book. It is hoped that this transaction will kickstart a securitisation market in the country.

Japanese consumer finance company Orico Corp this week launched the ninth securitisation of auto loans from its Oscar programme with a dollar and euro denominated deal via Mizuho International. Oscar Funding Corp IX offered $153m and Eu148m of triple-A notes rated by Moody's and Standard & Poor's. They were priced at 35bp over one month floating rates in the respective currencies with an average life of 1.63 years.

Despite a successful roadshow, global cement and clinker manufacturer Holcim Finance Australia was unable to launch its debut A$300m two tranche domestic deal in a week when the bottom fell out of Australia's equity and bond markets. With spreads widening anywhere between 3bp and 20bp on Tuesday and Wednesday, the BBB+ rated Swiss corporate found itself battling against defensive investor sentiment.

Indonesia PT Bank Mandiri was still roadshowing a $150m subordinated bond issue via UBS Warburg yesterday (Thursday). The roadshow is taking longer than expected, although an official at UBS said this was because people were still looking at the deal.

Rating: Aaa/AAA/AAA Amount: Eu300m CMS-linked obligations foncières

Export Development Canada (EDC) and Wells Fargo were the only issuers willing to brave the global bond market this week as plunging equities, yet more accounting scandals and signs that the US economy is still struggling sent investors reeling. Both Wells Fargo and EDC were able to make the most of a continued flight to quality by issuing $500m 5.5% 10 year and $500m 4% five year global bonds,

Dubai Aluminium (Dubal) is securing a number of bilateral facilities to support the firm's Kestrel expansion project. This week the company announced it had concluded a $200m loan from Citigroup/SSB. Other recently signed bilaterals include a $75m loan from Crédit Agricole Indosuez and a $150m facility from Standard Chartered. A further four or five facilities will be put in place over the next month or so.