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Morgan Stanley this week completed the pricing and tranching of its latest ELOC deal, a transaction that was expected to bring hope to the subdued market of hotel securitisations. HOTELoC plc offered rare exposure to the UK hotel sector via a single commercial mortgage and incorporated a dollar tranche. But despite the scarcity of hotel property transactions, the notes are reported not to have been fully sold at pricing. Morgan Stanley would not comment this week as to whether the bonds were all sold.

ABN Amro will next week launch a Eu375m securitisation of residential mortgage loans for Friesland Bank. Price talk on Stichting Eleven Cities No 1 is the 24bp area over three month Euribor on the triple-A notes with a 6.4 year average life. The two 10 year bullets rated single-A and triple-B have price talk of 63bp area and 120bp area. Bear Stearns is set to launch and price RMAC 2002-NS2 plc next week, the latest £525m residential mortgages securitisation for GMAC-RFC Ltd.

Bupa, the provident association which runs private hospitals as well as private medical insurance and nursing homes, last week closed a £450m whole business securitisation of its private hospitals business. Lead managed by HSBC and RBS Financial Markets, the deal is only the second securitisation of private hospitals to date in the UK whole business market. Last July Morgan Stanley launched a £975m securitisation for venture capital house BC Partners of General Healthcare Group (GHG), which the group bought in September 2000.

Bank of America, J.P. Morgan, UBS Warburg and Morgan Stanley will be approaching top-tier institutional lenders of Del Monte this summer ahead of the September retail launch of a new $1.6 billion bank deal. J.P. Morgan and B of A each have taken 30% of the deal, with UBS and Morgan Stanley taking 20% each.

Credit Suisse First Boston, Lehman Brothers and Royal Bank of Scotland are preparing a mammoth leveraged loan and bond deal backing Kohlberg Kravis Roberts and Wendel Investissement's attempted buyout of Legrand from Schneider Electric for EUR3.7 billion. If the deal goes through, the proposed financing would comprise more than EUR2.6 billion in bank debt and approximately EUR900 million in bonds. That translates into total leverage of six times and senior leverage of four times, one banker noted, adding that those levels are pretty aggressive.

Bank debt of Level 3 Communications jumped some 10 points to the 68-70 level after the announcement that the company would raise $500 million in new capital from Longleaf Partners, Berkshire Hathaway and Legg Mason. Last week, investors could have bought the paper in the high 50s, one dealer said, noting that more than $20 million had changed hands after the announcement earlier this week. Investors perceived the move as a sign of positive support for the beleaguered telecom industry.

WorldCom's bank and bond levels narrowed to the 20-22 level after Qwest Communications International announced that it was the center of a criminal probe. Dealers still maintain that the company's bank debt has not yet changed hands since it plummeted last month, although rumors of trades still continue to circulate around the market. "It's a train wreck if anyone were to trade it down there," one dealer said.

Levels for Qwest Communications International's bank debt fell to a wide 75-80 after the company admitted that the U.S. Attorney's office in Denver was conducting a criminal investigation into the company. The name had been offered at 83 before the announcement, one dealer noted. No trades were reported and another dealer suggested that investors are waiting to see what happens next. A spokesman confirmed the investigation but said the U.S. Attorney's office has not disclosed the scope or the specifics of the probe. He could not comment on the bank debt levels.

Portfolio Partners, a Melbourne-based fund manager with over AUD10 billion (USD5.65 billion) under management, is considering making its first use of credit derivatives to gain exposure to credits it cannot access via the cash market. "If we saw a tremendous opportunity in the default-swap market, we could get the documentation up and running fairly quickly," said John Hopper, senior manager of the AUD4 billion fixed-income portfolio. Portfolio Partners is currently "keeping abreast of developments in the market" and could trade default swaps within six months if investment opportunities arise.

AmeriCredit, a U.S. auto financier with a USD13 billion loan portfolio, is considering entering interest-rate swaps to convert floating-rate obligations into a fixed-rate liability next month, said Kim Pulliam, senior v.p. in Forth Worth, Texas. The company, which has USD800 million in revenue, is planning to securitize its auto loans next month to the tune of roughly USD1-1.5 billion. While the majority of that deal is likely to be issued in fixed-rate, she said the company may also issue several hundred million dollars of floating-rate debt in the deal, depending on investor demand for floating-rate paper. AmeriCredit would then seek to convert that liability into fixed-rate and pay a spread over six-month LIBOR.

Bank of America has hired Robert Webster, director and senior counsel, in a similar position. He will report to Leonie Brown, assistant general counsel in London.

Bear Stearns last week brought aboard Kin Sang Cheung, co-head of equity derivatives structuring and exotics at Lehman Brothers in Tokyo, in a new position as senior managing director and Asia head of equity derivatives trading, according to market officials. "We think he's really talented. To get a guy like him is a pretty good thing," said Lenny Feder, head of trading at Bear Stearns in Tokyo, noting that Cheung has over 15 years of experience in the business. Cheung, who was traveling to New York and could not be reached for comment, now reports to Feder. Feder continued that Cheung has joined in a new senior role and will work alongside Susan Chan, managing director of equity derivatives trading in Tokyo. Feder noted that Cheung was brought aboard to add experience to aid in boosting the firm's presence in equity derivatives in Asia.