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A handful of borrowers have come to market in recent weeks to score cheaper deals via refinancing, pinching investors eager to stay in deals but loath to give up precious basis points. Iron Mountain,Caremark RX, Isle of Capri and Printpack have all cashed in over the past few weeks, shaving as much as 3/4% off the pricing on their deals. Investors are forcing smiles and chipping in for the refinancings, but it isn't easy. "You don't really want to see the paper in your portfolio deliver poorer returns," said one investor, noting that a name that was paying LIBOR plus 3% or more is now considerably less juicy. "But you do need to stay weighted and stay in on a deal."

Quotes on Covanta Energy's bank debt ranged as much as 15-18 points last week after the company filed for bankruptcy on Monday and word of a debtor-in-possession deal circulated. Dealers had quoted the name as high as the low 70s and as low as the mid-50s over the week with one trade reported at 60. Market players suggest that there is a DIP on the table that will offer participants extra security. "Some of the unfunded commitments like the letters of credit will get rolled into the DIP," explained one trader of the rumored deal. More information could not be obtained by press time. Calls to Lou Walters, company treasurer, were referred to a spokesman who did not return calls.

STERIS used strong banking relationships and better operating performance to refinance a $325 million, three-year revolver maturing in June 2003 under more favorable terms. The new $325 million credit offers the company lower borrowing costs and increased covenant flexibility, said Bill Aamoth, company treasurer. He noted that "pricing is much improved," but declined to elaborate on the exact pricing and covenant changes.

Fixed-income strategists disagree over whether the prospect of declining foreign investment as a percentage of total new issuance in the U.S. corporate bond market will significantly impact spreads. Last year's increase in foreign investment was critical to helping the market absorb a record year in corporate bond issuance, says Louise Purtle, head of U.S. credit strategy at Creditsights, an independent fixed-income research firm. Still, Purtle sees that trend reversing for two reasons. First, she says negative carry in the dollar versus the euro will reduce incentives to invest in dollar-denominated issues. Also, she believes the foreign investors were attracted to the U.S. market because it gave them an opportunity to diversify their sector allocation and credit risk. However, much of the recent surge in issuance is in high-quality, financial institutions seeking to reduce their reliance on commercial paper. Purtle says foreign investors have sufficient opportunity to invest in such credits in their home countries.

An improved financial position and a strategically sound acquisition have resulted in a Moody's Investors Service Ba3 rating for the company's $300 million credit. Bank of America and FleetBoston Financial lead the deal, which is currently in the market (see story, page 3). Team Health, which provides physician staffing and administrative services to hospitals, is buying Spectrum Healthcare Resources for $147 million, explained Russell Pomerantz, v.p. and senior analyst at Moody's. In addition to the new rating, Team Health's $100 million in 12% senior subordinated notes have been upgraded to B2 from B3, due to an improving credit profile since a recapitalization in 1999 and consistent performance.

Fitch Ratings affirmed Tenneco Automotive's senior secured bank debt at B+ as the company focused on managing its cash and cutting its working capital needs in the midst of a difficult environment for auto-part companies. "Last year they did well to generate cash by focusing on the working capital base," said Scott Lee, Fitch analyst. He noted that debt on the company's balance sheet declined by $12 million relative to last year. "On top of that their cash balances increased and they have ample liquidity in their revolver and cash on hand," he added.

Following Fiat's announcement of a 20% drop in sales for March, London-based analysts say it is time to sell its bonds. Despite enjoying a massive spread tightening last month when Moody's Investors Service put Fiat on review for downgrade--its bonds tightened by 50 to 60 basis points--analysts expect the auto-maker to be downgraded one notch from Baa2 and its spreads to blow out. "It's time to get out," says Cyril Benayoun, an analyst at BNP Paribas. Much of Fiat's tightening to date has nothing to do with the credit's fundamentals, but has come on the back of general positive sentiment on the economic recovery, which caused spreads throughout the sector to contract, he adds.

It was all AOL Time Warner this week as the company hit the market with a $6 billion 4-tranche offering. The deal was increased from the original $3 billion size due to heavy demand. AOL Time Warner was the latest example of a company accessing the bond market to term out commercial paper and other short-term borrowing. GECC ($11 billion), Verizon ($2.5 billion), Morgan Stanley ($6 billion) and Credit Suisse First Boston ($2.5 billion) have all done jumbo deals in the past month to replace shorter term borrowing or to pre-fund maturities later in the year.

Sell-side cable analysts are sharply divided in their outlook for the bonds of Adelphia Communications, in the wake of the cable company's disclosure of $2.3 billion in off-balance sheet debt. David Allen, high-yield cable analyst at Morgan Stanley, says that though he does not support the lack of disclosure by the Rigas family (which owns Adelphia) regarding its accounting practices, he believes the bonds are undervalued. He raised his ratings on the company's three senior notes issues from "outperform" to "strong buy" after they dropped 14 points in the wake of the recent disclosure, and the announcement that the company would be late in filing its annual report pending a review of its books by Deloitte & Touche.

Sabrina Del Prete has joined Barclays Capital's collateralized debt obligation group in London from J.P. Morgan Securities. She will be a senior product manager reporting to Eileen Murphy, global head of CDOs. Murphy, who is based in New York, says Del Prete's new role will be to coordinate and build the CDO distribution capacity of Barclays out of Europe. Del Prete will coordinate origination and structuring operations with sales and distribution efforts out of London, says Murphy. She says she will add another London senior banker within two months to work with Del Prete.

Société Générale is believed to have traded about $30 million of Conseco's bank debt in the 84 1/2-85 range last week with Deutsche Bank and J.P. Morgan each reportedly picking up $15 million of the name. Traders said that the paper fell from the 85-86 level where it had been trading two weeks ago. Activity on the name comes as Angelo Gordon &Co. announced it is suing the company in response to an amendment the company made to its credit agreement. A spokesman at SG declined to comment. Officials at Angelo Gordon declined to comment.