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J.P. Morgan and Salomon Smith Barney reportedly are arranging $800 million in bank debt and $680 million in bonds to back the acquisition of Burger King by a consortium of private-equity firms. Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners are purchasing the giant fast-food franchise from Diageo for $2.26 billion, though Goldman Sachs at this point is not confirmed as a lead on the debt financing, according to bankers. The sponsor firms are believed to be putting in $780 million of equity to fund the deal, but officials at the firms either could not be reached or declined to comment on the financing arrangements.

A weaker-than-expected earnings picture for energy service providers should cause buy-siders to reevaluate credits such as Trico Marine Services, Hornbeck Offshore Services and Grey Wolf, according to Christy Parsons, high-yield energy analyst at CIBC World Markets.

Kinetic Systems postponed its $210 million refinancing in conjunction with the decision to temporarily put its initial public offering on hold because proceeds from the IPO were to be used to reduce the company's total debt, said Judy Rogers, corporate treasurer. The Santa Clara, Calif., company decided not to move ahead with its IPO because it could not successfully complete the offering with any degree of certainty due to choppiness in the equity markets, she explained.

Morgan Stanley and UBS Warburg pulled a $230 million refinancing credit for New World Pasta from the market last week after investors balked over the terms of the deal and the company refused to pay the new tougher terms investors were demanding. "The company wanted to repay $55 million of subordinated debt, replace it with senior bank debt and cut pricing," said one buysider, echoing the concerns of fellow investors.

Investors didn't shy away from the bank debt of Qwest Communications International despite the announcement that the Denver telecommunications company incorrectly accounted for more than $1.1 billion in transactions. Early last week, traders said $5 million and $10 million pieces traded into the buyside in the high 60s. But with Qwest's bonds on the decline, traders said the paper had sunk to the 55-60 range by midweek.

Salomon Smith Barney and Bank of America are doing preparation work on a $675 million credit for Rayovac Corp., backing its $262 million acquisition of the consumer-battery operations of Hannover, Germany-based Varta. The Varta consumer business outside Germany will be bought outright, while the German consumer battery operation will be set up in a joint venture that will be 51% owned by Rayovac.

Scotia Capital has merged its U.S. high-yield and high-grade trading, sales, research and origination businesses, according to Frank Pinon, managing director and former head of high grade. The move was made to cut costs and better address the needs of clients, who are increasingly investing across the credit spectrum, Pinon says. He now becomes co-head of the U.S. credit business with Amil Schiaffino, managing director and the former high-yield head.

Salomon Smith Barney has hired three mortgage veterans to boost its efforts in sub-prime mortgage backed security origination, according to a memo obtained by BondWeek. Evan Mitnick joins from Greenwich Capital Markets, Randy Appleyard comes from AGS Financial and Ken Mulford joins from Merrill Lynch. The three will be v.p.s and report to Susan Mills, the director of the firm's mortgage origination efforts. Mills says the hires are to fill the gaps left by the departures of Jay Lown and Christine LaVelle several months ago. She says that the hires, who average 10-15 years of MBS origination experience, are also congruent with the firm's decision to focus more effort in the whole loan origination area, noting that future additions to the group would be at the junior level.

Salomon Smith Barney has formed a new collateralized debt obligation group called Global Portfolio Solutions by merging the cash flow and synthetic businesses at a global level. New York-based Janice Warne and Sumit Roy have been named global co-heads of the new group. They both keep their former assignments in addition to co-heading the new group. Warne continues to head global structured bonds, which is comprised of private placement, leasing securitization, project finance and enhanced equipment trust certificates. Roy keeps his global head of credit derivative hat as well. Rick Caplan, Nestor Dominguez and Doug Warren will co-head the U.S. part of the new CDO group out of New York while Tim Beaulac and Alan Shaffran will co-head the European component from London. All five report to Warne and Roy. They either did not return calls or declined to comment. Dan Noonan, a firm spokesman, declined to comment.

The final week of July continued the dismal issuance totals with the primary market remaining effectively closed for all but sporadic deals. Only $2.3 billion of investment- grade deals came to market during the week and the $16.2 billion total issuance in both investment-grade and high-yield for July is the lowest monthly issuance on record in the last seven years. The low issuance volumes and other evidence of the degree to which the extension of risk capital has shut down is causing widespread concern that we are entering a credit crunch and August's issuance volumes will be closely watched for evidence that the current frozen conditions are beginning to thaw.

Korea Korea Electric Power Corp (Kepco) received final submissions for a planned dollar denominated bond issue this week.