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Mike Smith will join Wachovia Securities today as a high-yield trader, according to a firm insider. It could not be determined whether he is replacing someone or filling a newly created position. Tim Dowling, managing director in high-yield sales and trading at the Charlotte, N.C.-based dealer, did not return calls. Smith resigned from Merrill Lynch earlier this year (BW, 2/10). He could not be reached.

Summer volumes reached exceptionally quiet levels this week with a mere $2.6 billion of investment grade deals coming to market, supplemented by a single high yield deal. The 4-week moving average deal size has dropped to levels as low as we have seen all year and the average rating quality is climbing as the primary market continues to be impacted by the risk aversion, volatility and illiquidity in the secondary market and the ongoing equity weakness.

American Commercial Lines (ACL) recently restructured its credit facility in conjunction with a larger recapitalization sparked by its acquisition by financial services firm Danielson Holding. For the new credit, ACL split its $100 million revolver into a $50 million revolver and a $50 million "A" term loan, according to Jim Wolff, cfo. This was done at the request of its banks, which wanted borrowings under the revolver to better reflect what the company could pay down in one year, he explained.

A pair of high-yield healthcare analysts are advising investors to buy HealthSouth bonds, which were subject to heavy selling recently on rumors that the crossover healthcare provider may have accounting-related skeletons in its closet. However, "the rumors don't seem to be well-founded" in the case of HealthSouth, says Susannah Gray, analyst at Merrill Lynch. Another analyst, who dislikes the company because he says it continually reneged on promises to pay down debt in 2001, also believes the bonds will rally. "But then I'd probably short them," he says.

Qwest Communications' bank debt traded last week in the 69 context, after Standard & Poor's downgraded the company from BB+ to B+ over concerns that it would not be able to meet a bank covenant or handle $6.5 billion of debt coming due in May 2003. Market players quoted wide levels for the paper on July 11, with some citing the market in the low 60s and others calling for bids as high as 70. The name has fallen from the 75-80 range, where it had come to rest after the company admitted that it was the subject of a criminal investigation (LMW, 7/15).

Centennial Communications also got a boost last week, first off the back of Nextel Communications' positive earnings announcement and then from its own stronger quarterly results. Roughly $10 million was believed to have traded in the 66 1/2 67 1/2 context. Levels were recorded in the 68-69 range by the middle of last week.

Some $25 million of a planned $275 million bond offering for Berry Plastics has been shifted to the $305 million "B" term loan. A banker said the bond market has backed up whereas the loan was heavily oversubscribed, prompting the shift in funds. Pricing on the now $330 million institutional tranche also was flexed downward 25 basis points to LIBOR plus 3%. Officials at Goldman Sachs and J.P. Morgan, which are leading the financing package, declined to comment.

After monitoring demand from the credit markets, Community Health Systems decided to take advantage of the current environment through an early refinancing of its bank facility. The former credit was set to mature in 2004, but the markets were favorable, in particular the "B" market, noted Jim Doucette, treasurer. As a result, the "B" piece was increased from $800 million at the start of syndication to $850 million to meet investor appetite, he said. The revolver, however, was reduced from $450 million to $350 million, although Doucette declined to say why.

Levels for Conseco's $1.5 billion in bank debt, which matures in December 2003, dropped from the low 70s to the mid-60s over fears the company has hit a wall with its ongoing restructuring efforts. "The company is falling short of its targets," one dealer said, adding that market players are wondering if Conseco can avoid bankruptcy. Dealers said the paper traded in the 66 1/2-67 1/2 range, down from the 84 1/2 - 85 level where it had been moving in April.

Credit Suisse First Boston and Wells Fargo Bank have landed the lead roles on a $900 million debt financing package backing URS Corp.'s acquisition of EG&G Technical Services from The Carlyle Group. The debt package will consist of $650 million in senior secured bank debt and $250 million via a senior subordinated note offering. David Nelson, treasurer of URS, did not return calls. A spokesman for Wells Fargo confirmed that the bank is co-leading the deal, adding that it has been a relationship lender to URS for several of its more recent transactions. Officials at CSFB declined to comment.

Service Corp. International saw its 6% notes of '05 (B1/BB-) drop nearly two points to a bid of 88 after the unexplained resignation of Jerald Pullins, coo of the funeral services provider. A successor has been chosen from within the firm.

A committee of 15 WorldCom investors with over $8 billion in the company's bonds has formed a committee and tapped Houlihan Lokey Howard & Zukin last Wednesday to serve as its financial advisor in negotiations with the scandal-ridden telecommunications company. The committee hopes to unite with two other groups of investors that own the bonds of WorldCom's subsidiaries: MCI and Intermedia to give it more clout. Jeffrey Werbalowsky, senior managing director and co-head of Houlihan Lokey's financial restructuring group, acknowledged that his firm is advising what he called an "informal" group of WorldCom bondholders, but declined further comment. A WorldCom bankruptcy was widely viewed as imminent at press time. Jim Millstein, managing director at Lazard Frères, which is advising WorldCom, declined comment.