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Wells Capital Management is moving to drum up new Asian clients for its international fixed-income product, which invests in non-U.S. sovereign debt. The firm will eventually look to hire new officials in its existing offices in Hong Kong and Taiwan, and start new offices in Manila and Singapore, says Graham Allen, the firm's director of global fixed-income. He says a widespread shift among investors into international bonds and a sense that the dollar may be topping are among the reasons behind the push. Wells Capital hopes to land $200-400 million in new Asian business for the product over the next 18 months.

WorldCom is working with its bank group to amend the financing arrangements on a $2.65 billion, 364-day revolver as the market for the credit sunk to the 60-70s level from the 80-85 range two weeks ago. The credit is led by J.P. Morgan and Bank of America. The company also has a $3.75 billion, multi-year revolver and both facilities mature in June. The credit agreement allows the company to term out the 364-day facility and investors are worried that after the $3.75 billion line matures next month, the company will draw down and term-out the $2.65 billion facility. Dealers said that the company does not need cash at this time, but rather the liquidity associated with having the credit available. Both revolvers are currently unfunded.

Credit Suisse First Boston and Lehman Brothers launched syndication of a $200 million refinancing for Mobile Storage Group last Friday. The loan, which consists of a $60 million, five-year revolver and a $140 million, seven-year "B" tranche is priced at LIBOR plus 21/ 2% and LIBOR plus 3%, respectively. There is also a 50 basis points commitment fee on the revolver. CSFB is the administration agent and Lehman is the syndication agent on the loan. Union Bank of California is the documentation agent. Expected ratings on the debt are Ba3/BB. Calls to company and bank officials were not returned.

Deutsche Bank has hired Seth Vance, formerly Schroder Salomon Smith Barney's head of collateralized debt obligations for Europe, as a senior banker on its London-based securitization team. Vance joined Deutsche Bank in late April and will report to Michael Raynes, head of the European securitization group. Raynes says Vance will work on CDOs, but will also cover a number of different fronts. Calls to SSSB's press office inquiring about Vance's replacement were not returned.

The European high-yield market appears to have propped itself up in bed as it struggles to recover from an extended technology, media and telecom hangover. After a first quarter that saw only six new issues, two deals were snapped up in two days last week, and a third, from Britax Group, which makes autoparts and car seats, was expected to price last Thursday or Friday. Several other deals are said to be on the way.

Farmland Industries' $350 million, five-year revolver and $150 million, two-year term loan have been downgraded from B1 to B3 by Moody's Investors Service because of the company's strained financial flexibility. Weaker fertilizer market conditions, disappointing proceeds from non-core asset sales and imminent maturities from a continuous debt program may cause the company to be in covenant violation on this recently syndicated credit. The company is dependent on this revolver for its liquidity.

First Health Group has switched lead banks for its new $400 million, five-year revolver, choosing Bank of America over LaSalle Bank. Joe Whitters, cfo of First Health, said the company negotiated with several banks, both inside and outside its current bank group, and decided that B of A had the best capabilities and offered the best services to lead the new credit. LaSalle Bank participated in the new syndicate, in addition to BANK ONE, SunTrust Bank, and BNP Paribas, all of which participated on the old deal.

Fleet Capital dislodged Wachovia Bank as lead lender to Russell Corp. when it syndicated a $325 million credit facility for the athletic sportswear company last month. "Russell needed to replace the old credit line within 12-18 months and the strength of the markets made it a very good time to do this," said Thomas Johnson, director of investor relations for Russell. Johnson declined to name the old lead bank, but said, "We liked what we saw in the proposal. Good pricing, terms and their ability were the reasons to switch to Fleet." Explaining the timing of the refinancing, he added, Russell was aiming to trim interest costs, term out debt and increase operating flexibility.

Collateralized debt obligations backed by loans overtook deals backed by bonds in the first quarter, according to a report from Banc of America Securities last week. The report validates what market players have been saying, as investors have become increasingly interested in the loan asset class. "We expect loans to outpace bonds, but we expect the ratio to lessen over time," saidLang Gibson, analyst at Banc of America. Gibson said the cause for the loan pop relates directly to an investor base more interested in high-yield loan collateral than bond collateral.

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."