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Fitch Rating's commercial mortgage-backed securities group has been downsized, says Mary Metz, managing director and co-head of the CMBS group. She says the move was prompted by the firm's loss of market share due to notching by rival agencies Moody's Investors Service and Standard & Poor's (see story, page 1).

Issuers of high-yield bonds are increasingly seeking information from fixed-income portfolio managers through investor surveys or "perception studies" conducted by Thomson Financial's Corporate Group business unit. Thomson has conducted such studies with equity investors for some 10 years, but only began polling fixed-income investors last July, says Justin Brimfield, senior associate in the fixed-income strategic intelligence group at Thomson Financial. Brimfield says fixed-income investors have been increasingly on the minds of corporate investor-relations executives because companies are issuing more debt. Other fixed-income executives say companies are fielding more calls from buy-siders as they lose faith in sell-side analysts and ratings agencies in the wake of recent blow-ups such as Enron and WorldCom.

Some market players say a bond deal may be ahead for Lyondell Chemical. The company recently filed a shelf registration for up to $3.335 billion in debt or equity securities. That move, combined with a red-hot bond market and the non-call provision on the company's term loan "E" expiring last month, have investors looking for a bond deal that is going to pay down some of the company's bank debt.

In the words on one trader, last week's tone was very "stinky." Bonds of Conseco Inc., Echostar Communications, Regal Cinemasand Lyondell Chemical Companywere all off a point to a point and a half.

HSBC Securities has lost two managing directors and corporate bond salesmen from its Boston office, as senior executives continue to depart the U.S. corporate bond group of the London-based bank. Jack McNeill and Kevin Kelly have left HSBC to open a Boston corporate bond sales office for FTN Financial, the investment-banking arm of First Tennessee Bank. Kelly says they made the move "for the opportunity," declining to elaborate. They will be senior v.p.s reporting to Brian Shapiro, New York branch manager at FTN Financial.

Carl Icahn is in the market for XO Communications' bank debt and reportedly has been buying up pieces to help protect his bond position in the beleaguered telecom company. Market players said Icahn made a direct appeal to investors in the bank debt, bypassing Wall Street trading desks by sending a letter saying he was looking to buy. The debt has moved up five points since Icahn's letter went out about two weeks ago. Approximately $25 million was believed to have changed hands at as high as 52, although the amount that Icahn bought could not be determined. The debt had been trading in the 46-47 range. Icahn's office declined to provide a copy of the letter sent to investors.

With the $14 billion of investment grade issuance that was issued this week, the investment grade corporate bond market has hit a $250 billion year-to-date total, which gets us halfway to the CreditSights full-year forecast for high grade supply. The pace reflects an uptick from May's subdued levels though we are still well shy of the thumping volume seen during March, and the average deal size is also rising. At $600 million we are heading into the top end of the range indicating both more depressed high yield primary market conditions of late and the effect of the sizeable programs of the likes of GE Capital. The impact of GECC's issuance activity is also evident in the average rating quality, which has been trending up over the last four weeks. The better bid tone in the market was seen with upsizing reported in higher quality issues in defensive sectors and ready demand found this week for even "troubled" names such as El Paso.

The $1.8 billion, 364-day revolving credit launched last week forWilliams Companies may face challenges from persistent questions about the propriety of its trading operations, according to Power Finance & Risk, an LMW sister publication. Bankers said the company story is a strong one, but the focus on trading could be a problem. "If they continue to be in the headlines every day, whether it is fair or not, it is going to make it tough," says one official, who attended the Houston bank meeting. The Federal Regulatory Energy Commission last week said the company had failed to cooperate with information requests related to its investigation into power trading in the western U.S. The move followed a published report that Williams tried to manipulate gas prices in California two years ago. Kelly Swan, a company spokesman, denied both charges.

Meanwhile, CSFB launched alphabet loans for Mueller and Metaldyne last week. The seven-year, $350 million "D" loan for Metaldyne is co-led with J.P. Morgan and offers a spread of LIBOR plus 23/ 4%. Rated BB-/B1, the credit backs the separation of the TriMas business from Metaldyne on behalf of sponsor group Heartland Industrial Partners.

Auto-parts retailer AutoZone has recently added a $150 million credit to its $200 million "A" term loan, extending the maturity 18 months past its former May 2003 expiration date. The company also renewed a $300 million, 364-day revolver that will be used to back up its commercial paper program, according to Michael Archbold, senior v.p. and cfo.

Bear Stearns has filled the "C" tranche created for Appleton Papers, with almost all the current investor group rolling into the deal. The deal was set to close last Thursday, said a banker, adding no new investors were invited into the deal. Some buysiders and bankers cited the deal as a challenge, pointing out the new $115 million "C" tranche is priced 1% below the existing "B," which offers a spread of LIBOR plus 41/ 4%. The original credit launched last year had to overcome concerns that Appleton operates in a sunset industry, at a time when the buyside was gun shy about committing to all but the defensive credits on offer (LMW, 8/10).

Shelley Ben Nathan has resigned from Bear Stearns, where she was a managing director and high-yield retail analyst, according to an e-mail message sent out to clients last Friday, which was her last day at the firm. "I have decided to change gears for a while and focus my energies full time on my family," she wrote. She has four children under five years old. Ben Nathan placed third in the high-yield retail sector for four consecutive years from 1997-2000 on the Institutional Investor All-America Fixed-Income Research Team. She did not return calls.