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Piero Overmars, head of global financial markets, will head a new department dubbed integrated debt. The department is being created by combining the global financial markets group and the loan products group. Eltjo Kok, head of the loan market group, will run the group finance division, according to a spokesman. Overmars will continue to report to Wilco Jiskoot, chairman of the wholesales business unit.

The Basel committee may eliminate restructuring as a definition of a credit event for the purposes of regulatory capital relief, a move that could have profound consequences for the credit derivatives industry. Norah Barger, chairman of the credit risk mitigation subgroup of the Basel committee in Washington, told DW, "This is still open for debate," adding, that the committee is willing to listen to industry comment.

Fiduciary Trust Co. will seek to buy up to $400 million in current coupon mortgage-backed securities to take advantage of spread widening due to expected refinancing activity. Mike Materasso, a portfolio manager who oversees a $4 billion core fixed-income portfolio, says that while refinancing risk is still high, he believes it will soon diminish. Before making the trade, the firm is waiting for spreads to widen beyond 200 basis points, or for 10-year Treasury rates to stabilize or increase. Spreads on 30-year Fannie Mae 6% notes were 198 basis points over Treasuries last Monday afternoon, while 10-year Treasury rates were at 4.24%. Materasso says Fiduciary will sell premium coupon notes to finance the trade.

After suffering months of shrinking spreads in the undernourished "B" market, buysiders are exacting revenge on Goldman Sachs' $350 million "B" loan for Verizon Wireless of the East. The single-A deal is set to close this week, but only after the loan was sold at 98 with a coupon of LIBOR plus 43/ 4%. In addition, investors would only commit when call protection was added into the mix at 105 in the first year, 102.5 in the second year and par in the third, thereby preventing Verizon from refinancing out early if conditions improve. Goldman bankers declined to comment, and Paul D'Auria, treasurer of Verizon, could not be reached for comment.

Principal Capital Management is planning to shift an additional 5%, or $325 million, of its $6.5 billion in multi-sector portfolios into mortgage-backed securities, says Lisa Stange, portfolio manager and bond strategist. She says the move will occur when the Lehman Brothers SOX index--which measures short-dated swaption volatility--pulls back from its recent highs of 43.5. She declined to offer a specific figure that would trigger the move, other than noting she seeks a level of short volatility that is more historically normal. The trade, to be financed by the sale of Treasuries in the five-to 10-year sector, is being put on because MBS, as well as callable agencies, traditionally outperform as volatility decreases, given the decreased probability of consumer refinancing. The trade would involve current coupon Ginnie Mae and conventional pass-throughs.

You've read in this space about the bumbling LMW staffer who accidentally dialed a phone sex line while trying to activate a Chase banking card (LMW, 7/15). That card must have carried a curse similar to Peter Brady's tiki doll in the Brady Bunch Hawaiian episode because it leapt from its bearer's pocket last weekend and made a break for freedom on the street. Because it has a MasterCard link as a debit card, that's a problem if it ends up in the wrong hands. But it was recovered by a Good Samaritan, who called Chase and had the troublesome card canceled. A new card, with good karma, is in the mail.

David Killian, portfolio manager at Stone Ridge Investment Partners, is looking to put on a Treasury barbell for 5-10% of the firm's portfolio in anticipation of a flattening of the curve. He says his barbell strategy will be used to reduce duration from its current 3.5-years to three-years. He will sell the intermediate portion of the Treasury curve, or Treasuries with five- to 10-year maturities. With the proceeds, he will invest in short-term Treasuries, under five-years as well as those with more than 20-year maturities. The rationale, as for any barbell strategy, is to avoid the belly of the curve, likely to depreciate the most once the curve flattens.

Fortress Investment Group and Greenhill Capital Partners had to return to the drawing board last week as the two equity sponsors realized the market would not accept more tower exposure under the terms of Pinnacle Towers' proposed new credit facility. Deutsche Bank and Bank of America were preparing a $340 million credit facility to back Pinnacle's exit from bankruptcy, but a punishing secondary market for tower names and specific concerns over Pinnacle are complicating matters.

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.

The drought in the primary corporate market continues with just $3 billion of investment-grade and $700 million of high-yield deals coming to market in the last week. This marks the seventh consecutive week where total volume has been less than $10 billion. This week's totals were only bolstered to the degree that they were by $1 billion deals from IBRD and Safeway, but issue sizes away from these deals were so small that the moving average of deal size fell during the week. With August typically the quietest month for debt issuance, a near-term rebound in volumes is not likely.

Moody's Investors Service has downgraded the senior debt rating of PG&E National Energy Group (NEG) from Baa2 to Ba2, citing the company's near-term liquidity issues, declining operating performance and negative prospects for wholesale energy merchant prices.