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The high-yield market was softer overall last week, though cable credits (ex-Adelphia) enjoyed a slight rebound. Early in the week, rumors continued to circulate that Paul Allen, Charter Communications largest shareholder, might buy back some of the company's bonds, or even take it private. Here was some other action:

Carl Icahn says that the amendment to XO Communications' bank debt agreement, which has essentially halted the trading of the name, amounts to an ego play on the part of the company's bank steering committee. "They don't want me to buy the bank debt because the steering committee would be out of control of the situation," the renowned financier said of the state of affairs surrounding the restructuring of XO and the lockdown in the secondary loan market.

Rumors that WorldCom is planning on drawing down on its $3.75 billion revolver, which is set to expire at the end of this month, caused both bank debt and bond debt players to fret over their exposure to the company last week. As LMW went to press on Friday, there were no reports of the facility being tapped. "For all we know, some bond guys could have started the rumor, hoping to drive down the prices and buy the bonds cheaply," one trader said. The spread on the company's bank debt was wide at 92-97, and no trades could be confirmed.

Jarden, formerly Alltrista, has chosen Bank of America to lead its new $100 million credit facility over the incumbent, BANK ONE. Ian Ashken, vice chairman and cfo, said the Rye, N.Y., company decided to switch its lead bank because the new management had a historical relationship with B of A. The company also was pleased that the bank group had decreased to 10 banks because it is easier to work on amendments to the agreement, if need be, he noted. CIBC World Markets, National City Bank, Bank of New York, FleetBoston Financial, Harris Trust & Savings Bank, U.S. Bank, Allfirst Bank, Transamerica Business Capital andUnion Federal Savings Bank participated on the new deal.

Trading levels for Kmart's bank debt fluctuated briefly last week, falling a couple of points on the fear that Martha Stewart would be implicated for insider trading on ImClone Systems. One dealer said more than $20 million changed hands by Tuesday, with the 364-day facility moving in the 73-74 range and the three-year facility moving in the 67-68 range. By Wednesday, levels had recovered and the name was said to be quiet. Calls to the company's spokesman were not returned by press time.

Merrill Lynch and Bank of America's credit for Advanced Medical Optics (AMO) proved a hit with the buyside last week, with roughly 25 institutions signing on. The credit was four times oversubscribed, leading to a 1/4% reverse flex on the $100 million "B" loan, said a banker. Pricing is now LIBOR plus 31/ 4% although, if AMO achieves a four-B rating, pricing will tighten further to LIBOR plus 3%. Moody's Investors Service rates the loan at B1--one notch lower than Standard & Poor's--but has the credit on positive outlook. Merrill bankers declined to comment, and B of A bankers did not return calls.

Lyondell Chemical announced last week that it would use $200 million of the proceeds from a $275 million offering of 10-year senior secured notes and an offering of seven million shares of common stock to pay down existing indebtedness under the company's term loans. Although the name was not changing hands, traders quoted the "E" term loan at 101 3/4 102 1/2, up from the 100 1/2 101 level two weeks ago. The loan has a call protection of 102.

As lead manager DBS Holdings set out to raise around S$300m from the float of CapitaMall Trust, other property stocks were hit as investors and analysts decided that valuations of commercial property in Singapore might need to fall to the yields required by real estate investment trust (REIT) investors. REITs are seen as one of the few avenues of liquidity for property companies, which are generally over-leveraged and therefore increasingly avoided by banks and bond market investors.

The miserable state of the Japanese equity market failed to derail the sale of the government's remaining 12.7% stake in East Japan Railway (JR East) this week. Goldman Sachs and Nomura completed the 500,000 share global placement at a discount of 3% to Monday's close. However, the final price was more than 10% below JR East's market price late last week and when premarketing began on the deal in late May.

Goldman Sachs this week raised $634m through the partial sale of the stake held by the firm's private equity arm in Kookmin Bank. Before exercise of the 15% greenshoe, the bank has sold a 3.46% holding. The firm bought the stake in 1999. If the shoe is exercised, the Goldman stake will drop to 5.3%.

Global co-ordinators Goldman Sachs and UBS Warburg are premarketing the sale of 14% of stae owned Korea Tobacco & Ginseng. The GDR deal will start officially on July 1, with pricing slated for July 12. Dongwon and Hyundai Securities are joint bookrunners. Deutsche Bank, ING, LG and Samsung Securities are co-leads.

The Federation of Malaysia is poised to launch the first ever Islamic law-compliant international dollar deal and bankers at lead manager HSBC said the signs are looking good for the $500m five year 144A Reg S transaction. "We have covered the planned $500m issue size through investor orders so far and there are still roadshows to be held in London and orders still to come from the Middle East," said a banker at HSBC. "So far there has been enthusiasm for the issue." The transaction is expected to be launched and priced on Tuesday.