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A $200 million high-yield deal recently pulled by PCA International will likely be restructured and brought to market in the next month or two, according to an official familiar with the deal. The seven-year deal was to refinance existing debt. Goldman Sachs is still expected to underwrite the deal. Bankers were reportedly hoping for a B3/B- rating, but the senior unsecured notes were assigned a Caa1 rating from Moody's Investors Service. Marie Menendez, a Moody's analyst, would not comment on how the deal could be structured to get a higher rating. Price talk had been sweetened to 12.5%, with 5% equity warrants, according to a report by Dow Jones Newswires. Don Mullen, co-head of leveraged finance at Goldman Sachs, referred calls to Bruce Corwin, a firm spokesman, who declined to comment. Don Norsworthy, PCA's cfo, did not return calls. PCA International sells photography services in retail locations such as Wal-Mart Stores.

Lenders offering financing to back the leveraged buyout of Qwest Communications International's directories business are banking that the bidding groups going after the business will help pull the credit through the badlands known as the pro rata market. The buyout, which could top out at $8 billion, figures to pit a sizeable pro rata portion against a market that has been generally weak and unreceptive. Bankers are hoping relationship building and the prospect of future business can ease the way. "The pro rata market is very difficult, and it is a consideration," said one banker who works with financial sponsors. "But the bidding consortium would help. If a bank commits then they have the relationship with four private equity firms. It's getting bang for your buck."

UBS Warburg and Morgan Stanley's credit for Rail America Transportation will be allocated by the end of this week, after the seven-year, $375 million term loan "B" was heavily oversubscribed. Pricing, currently at LIBOR plus 23/ 4%, has not yet been flexed, but one banker said it is still a possibility. The banks have not closed the deal because the issuer wants to create some subsidiary level debt in Canada and Australia, he added. The six-year, $100 million revolver is priced at LIBOR plus 21/ 4%. The deal was sure to be a lay-up, the banker noted, since the company is a repeat issuer, and the market is "smoking hot."

About $25 million of Adelphia Communications' Century Cable term loan traded at 91 1/2 in retail last week with a $2.5 million trade in the street last Thursday. The credit was rumored to have traded in the high 80s, although most dealers quoted the name in the 90-92 context. The name had been trading in the 93-94 range two weeks ago. A $25 million piece of Adelphia's Hilton Head facility was also believed to have changed hands at around 86. Investors are beginning to trade some of the name's more off-the-run facilities as they gamble on the value of the company's cable assets.

The value of fast-food company AFC Enterprises would be retained even in a bankruptcy scenario because the assets can be used for other purposes or by competitors, leading the bank loan rating to be the same as the corporate rating. Standard & Poor's has assigned a BB rating to the $275 million bank loan, launched into the market on April 26 byCredit Suisse First Boston and J.P Morgan. Jerry Hirschberg, an S&P analyst explained, "Those boxes AFC operates in are not singular in use. Unlike for example, Home Depot." Moody's Investors Service has rated the loan Ba2.

Roughly $15-20 million of Pinnacle Holdings was offered at 99 last week following news of the prepackaged bankruptcy plan. Traders quoted the market for the name in the 96-97 context two weeks ago. One dealer explained that as the name ticks closer to par many hedge funds that had bought in at levels close to 85 did not want to wait until as the name ticked closer to par. No trades were confirmed. "The paper should find a home based on what we know," said the dealer, referring to the strength of the plan.

A Japanese bank is rumored to have auctioned off as much as $140 million of Warnaco Group bank debt at 30-311/ 4 last Thursday as the company continues to work through its Chapter 11 reorganization plan. The name had been moving at 30 earlier in the week and had been quoted in the 24-26 range two weeks ago. The company is expected to file its reorganization plan soon. Reports indicated that Bear Stearns is helping Warnaco explore the sale of some of its core businesses, which include Calvin Klein Jeans. Warnaco licenses the right to make clothing under brands such as Calvin Klein, Warners, Speedo and Oscar de la Renta.

Bank of America and Deutsche Bank are preparing the launch of a $340 million exit financing for Pinnacle Holdings that will include a $300 million amortizing "B" piece. A banker said Pinnacle should emerge from bankruptcy in July and the loan will emerge concurrent with the company's exit. Pricing and terms on the bank debt, which also comprises a $40 million revolver, have not been finalized.

Bank of America is aggressively hiring for its London-based European fixed-income sales and trading efforts. Peter Plaut, head of European credit research, says the firm is looking to build its investment-grade and high-yield desks, but did not give a specific number of hires to be made. The firm has had a presence in the U.K. for two years and is looking to expand its headcount in response to business growth, he adds. Industry officials say B of A is also looking to ramp up its asset-backed securitization team. Calls to Arrington Mixon, head of European fixed income, and Steve Gandy, head of European ABS, were not returned.

CIBC World Markets' $500 million refinancing for Boyd Gaming, which will be launched into the market this month, is demonstrating the latest pricing trend in the loan market with the pro rata and "B" loan offering the same spread. A banker said the $100 million "B" loan and $400 million revolver are both priced at LIBOR plus 21/ 2%. Having the "B" spread the same as on the pro rata is being seen increasingly, said a banker, with some 15 deals so far this year following that form. Five "B" deals have set pricing below that of the pro rata, she said.

FPL Energy's long-awaited $2-2.5 billion construction revolver is in flux because co-lead arranger Citibank has reportedly declined to fully underwrite the credit. Fellow co-lead Bank of Nova Scotia is still working with the Juno, Fla.-based independent power producer, says a Scotia banker, declining further comment. A Citi official declined all comment and calls to FPL were not returned by press time, but project finance bankers say Citi is now effectively off the deal, according to Power Finance & Risk, an LMW sister publication.