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Owens-Illinois' carve-out term loan began trading last week with dealers trading more than $40 million in the 99 7/8 to 100 1/4 range and more traditional par players buying in. Although the paper is not funded yet because it is technically still revolver paper, traders said it was still moving on "when-issued" expectations for the term loan. The $40 million that traded is part of a $500 million revolver the company will carve-out as a term loan to make the paper more available to institutional buyers. The move was designed to redistribute exposure to the company by moving the paper out of the hands of pro rata lenders and into those of hungry institutional investors without syndicating a restructured deal. The banks holding a lot of the paper encouraged this move to make the name more liquid in the secondary market. (LMW, 4/1).

Fitch Ratings favorably views the agreement between PacifiCare Health Systems and its lenders to extend the maturity date of its senior credit facility by two years, as the company attempts to explore a more permanent and favorable capital structure. The agency has given PacifiCare an evolving outlook and if the company is successful in extending the maturity of its senior credit facility, Fitch expects PacifiCare's existing senior debt ratings will likely be upgraded one notch to BB.

Duckwall-ALCO Stores, a discount and hometown variety store operator based in Kansas, went out to the market to find a new lender and switched from incumbent Bank of America to Fleet Retail Finance. "We have had an ongoing relationship with Bank of America that goes back at least five years," said Dick Mansfield, v.p. of finance, treasurer and cfo, of the company. "As the maturity approached on April 15, we saw what was available and looked to find the best strategic fit," he added, noting "it was very competitive, but it always has been. We have a strong balance sheet, the kind of deal banks like to do."

Deutsche Bank, Bank of America, Morgan Stanley and Citibank held an institutional bank meeting last Thursday for Silgan Holdings, a consumer-goods packaging producer. "Silgan is refinancing the senior secured credit facility to take advantage of the current climate and investor enthusiasm for the paper," said Harley Rankin Jr., executive v.p. and cfo of Silgan. The new bank loan is $800 million, comprising a $400 million six-year revolver, a $100 million "A" term loan due 2008, and a $300 million "B" term loan also maturing in 2008. He declined comment on the bank line spread, but a banker said pricing is LIBOR plus 2% on the pro rata and LIBOR plus 21/ 2% on the "B" loan. There is also a $250 million uncommitted term loan facility. Deutsche Bank is the administration agent and B of A is the syndication agent.

Last week was modestly firmer through Thursday, say traders, with continued strong new issuance. Gaming, energy, and auto suppliers were among the better performing sectors, while wireless was flat overall. Here was selected action.

HSBC plans to double the size of its asset-backed commercial paper multi-seller conduit Bryant Park Funding to above $1 billion by this summer, says John Cutting, managing director and head of asset-backed securities. Bryant, launched last summer, has an overall maximum capacity of $5 billion. Jon Bottorff, managing director, who was hired by Cutting to run the conduit, says he wants to bring issuance to $2 billion by year-end and to $5 billion, next year (BW, 4/22). Once Bryant runs at full capacity, the bank will eventually consider creating a second U.S.-based ABCP conduit, notes Cutting.

J.P. Morgan and Credit Suisse First Boston pushed out incumbent leads CIBC World Markets and Goldman Sachs to lead the $275 million refinancing for AFC Enterprises by offering cheaper pricing. "CIBC and Goldman were interested in being the lead arrangers, but J.P Morgan and CSFB offered the best pricing and capability in the credit markets," noted Gerald Wilkins, executive v.p. and cfo of AFC. "CSFB has developed a strong relationship with the company after a secondary stock offering which they did a great job on," he added.

J.P. Morgan last week handed out allocations on the $100 million add-on for Interstate Bakeries. The deal backs the buyback of 7.5 million shares of the company from Tower Holding Company, a subsidiary of Nestlé. The new credit is a term loan "C" and is priced at LIBOR plus 2%, said an investor, expressing dissatisfaction with the lack of an up-front fee and the skinny spread. The food sector is pretty hot, as demonstrated by thin pricing and the mass of demand, he added. National Dairy Holdings (NDH) "B" term loan has been well oversubscribed and is being flexed downwards 1/4% from 23/ 4% over LIBOR, he added. Wachovia Bank leads the $300 million NDH credit. Final allocations could not be ascertained.

Lehman Brothers is seeking to add selectively to the headcount in its London-based debt capital markets unit. Christian Wait, head of European DCM, says he does not have an exact number of new hires in mind, but he would like to add bankers where he can shore up teams. He adds that he is on the lookout for good people who have been let go from other banks. Wait was named sole head of DCM earlier this year, when Marco Figus, moved to become the firm's senior relationship banker for syndication.

Credit Suisse First Boston and Salomon Smith Barney are on the road with a $250 million senior note offering for NMHG Holding Co., a holding company for NACCO Industries, in addition to the $175 million three-year revolver launched at the start of the month. The agencies have given the lift-truck company loan a BB-/B1 rating, according to a banker. Pricing on the credit is LIBOR plus 3%, with a 1/2% upfront fee. The company is refinancing existing debt, he said. CSFB is the syndication agent and Salomon is the administration agent on the loan. Price talk on the notes could not be ascertained and Ira Gamm, manager of investor relations for the company, declined comment until the note offering is complete.

Christopher Ayoub, former managing director and head of the core bond group at Merrill Lynch Investment Management, has retired after 20 years with the firm. In his job at Merrill, he oversaw $4 billion in taxable fixed-income, primarily investment-grade corporate bonds. Ayoub has been replaced by Patrick Maldari, according to Cristine Walton, a firm spokeswoman. He had been manager of the firm's low duration team.