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Owens-Corning's bank debt ticked up last week, with $30-35 million trading at 70-71 as market players continue to speculate on the effect that subsidiary guarantees will have on the payback bank debt holders receive from the bankrupt fiberglass company. Between $20-25 million traded last Monday at 70 and by midweek roughly $10 million more in trades had moved the name to the 71 level. One trader explained that some of the company's subsidiaries held patents and are entitled to a stream of royalties. The guarantees suggest that bank creditors would be entitled to these proceeds and other subsidiary value.

Dade Behring's bank debt is flying high in the 109-110 range with $10 million trading on Wednesday, as investors gauge the value of a potential debt to equity swap. Two weeks ago the name had been priced in the 105-106 context. The company has been in negotiations with lenders, bond and equity holders for some time, but traders now speculate that an agreement is in the offing. A spokesman for Dade Behring confirmed that the company is continuing "productive negotiations," but said no agreement had been reached. He also noted the company's recent strong performance.

RCN's bank debt jumped last week with $30 million trading as the market buzzed with word that the company will pay down approximately 25% of its outstanding bank debt. About $25 million traded at 80, up from 70 earlier in the month, with PNC Bank reportedly involved in the deal. A spokeswoman for the bank declined to comment. Earlier last week, $5 million changed hands at 78.

Crown Cork & Seal's bank debt traded flat at 87 last week with $20 million changing hands on continued belief that the company will have to refinance its debt. Dealers believe the company plans to take out its 2002 maturing debt, which includes $350 million in bond debt and the outstanding amount on a $400 million term loan. It will then need to refinance an additional $2.2 billion dollars in bank debt, which expires in December 2003, before it begins to deal with $400 million of bonds also maturing in December 2003. Rumors suggest that any refinancing plan would be structured such that bank debt holders are backed by a first lien on the company's assets and bond holders would be backed by a second lien on the company's assets. This security would place bank and bond creditors above asbestos liabilities in case of default, one banker explained.

Corporate Office Properties Trust, a real estate investment trust, has brought PBNT Bank on board for a $25 million add on to an original $125 million revolving credit line. The company approached PBNT in an effort to extend the credit to another of its relationship banks, said Roger Waesche, senior v.p. and cfo of Corporate Office Properties. "We want to make sure that we have enough capacity, so we spread [the credit] out on a number of banks," he explained. PBNT committed $15 million to the expanded credit and the remaining $10 million was raised through the original syndicate led by Deutsche Bank.

Approximately $48 million of Safety-Kleen's bank debt traded last week, culminating with an $18 million auction of the pro rata piece in the 44-45 range. Traders said the name was moving on the belief that a lawsuit against the company will soon settle in Safety-Kleen's favor. UBS Warburg is rumored to have traded a total of $30 million of the name in the 40s range earlier in the week, although no one at the bank could be reached for comment. John Kyte, Safety-Kleen's spokesman, said he could not comment on the pending litigation, but added, "Our position is that the case has no merit."

Bank One Capital Markets has made three new hires to its London-based asset-backed securitization team. On the origination side, Pedram Mazaheri and Cristina Baca have joined from Enron (Europe) and Nischal Patel has joined as a credit underwriter. Patel is also from Enron. The hires were made to beef up the firm's fledgling European ABS effort, says Brooks Crankshaw, head of European ABS.

Bear Stearns is combining its synthetic CDO group with the bank's cash flow underwriting CDO group, according to LMW sister publication, BondWeek. A senior CDO banker at the firm said the merger of the synthetic and cash flow groups is designed to avoid double pitching of CDO deals by two separate teams of bankers to the same collateral managers. Senior managing director Lesley Goldwasser will oversee both synthetic and cash flow CDO originations, the banker said.

BNP Paribas is looking to hire one or two senior analysts for its high-grade research team. Joe Labriola, head of U.S. investment-grade research, says his team of five senior analysts and three associates still lacks sector expertise in chemicals and paper and forest products. He says the French bank has not had an analyst covering those areas for over a year, because it has not been able to find an acceptable candidate. However, Labriola says he is zeroing in on a couple of prospects, and hopes to make a hire fairly soon. BNP Paribas also has had a hole to fill in the energy and utilities sectors since it released Dan Scotto, former co-head of research with Labriola, last December.

InfoUSA secured lower interest rates and increased financial flexibility on a best-efforts $110 million credit facility with Bank of America as its new lead lender. The company refinanced a Deutsche Bank-led $195 million credit well ahead of its maturity date in exchange for better terms. "We felt that we could achieve a more beneficial rate structure and covenant flexibility if we went out and shopped the deal," explained Tim Hoffman, v.p. of finance for infoUSA. Deutsche Bank, preferring to have the "name plate" rather than a supporting role, did not participate on the new syndicate, said Hoffman, noting the split was cordial.

Existing collateralized debt obligations will not be grandfathered under the Financial Accounting Standards Board's proposal to raise the required equity in CDOs from 3% to 10%, much to the dismay of CDO managers, who may have to consolidate these off- balance sheet transactions on the balance sheet. FASB is seeking to implement the new rule in July and rating agency analysts and managers are still unclear of the potential impacts or feasibility of restructuring past transactions. But the initial take is not good. "It's not a viable option," said Andrew Dickey, managing director at MassMutual subsidiary, David L. Babson, regarding the idea of an equity overhaul.