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Kmart's $2 billion debtor-in-possession facility jumped into the market last week as $25-35 million traded in the 101 3/4-101 1/4 range. Dealers said J.P. Morgan was selling and that both street and institutional players were among the buyers. A J.P. Morgan spokesman declined to comment. One trader attributed the popularity of the paper to the asset-based nature and attractive coupon on the deal. "It's a no brainer," he said. J.P. Morgan, Fleet Retail Finance, Credit Suisse First Boston and General Electric Capital Corp. lead the deal, which includes a $200 million institutional piece. The name's original $1.5 billion credit facility took a back seat to its younger cousin. Dealers said the name traded scarcely in the mid-60s. Calls to John McDonald, executive v.p. and cfo of Kmart, were referred to a spokesman, who did not return calls by press time.

Three managers of a distressed debt fund at Lazard Frères left the firm last week for the Quadrangle Group, a New York-based $1.1 billion private equity firm run by Steven Rattner, the high-profile former Lazard deputy chairman. Lazard will cease operation of the fund, according to Joele Frank, an outside spokeswoman. "As a result of these abrupt departures, we have concluded that the best interests of investors require that we begin an orderly winding down of the fund," she said.

Lehman Brothers is establishing a London-based European asset-backed research team. Krishna Prasad, who has been covering U.S. ABS in New York for five years, will be heading the team and plans to add two or three analysts. He says it has not been decided if the new additions will be internal or external hires. Previously, Lehman had been covering European ABS from the U.S., but Prasad says that the business has grown to a size where it merits its own research effort on the ground. Prasad, who had been covering European ABS from New York, in addition to his U.S. coverage, will assume his new role this week.

Mishawaka, Ind.-based National Steel has been provided in principle with a $450 million debtor-in-possession facility by a group of lenders after filing for Chapter 11. Terry Fahn, a spokesman for National Steel, said Citibank, CIT Group, Heller Financial, Fleet Capital, GMAC and Fuji Bank are among the lending group. The banks are part of the pre-petition facility, he added. Hisashi Tanaka, chairman and ceo, said in a statement that the "historically low steel prices and a weak economy impeded the company's ability to service its debt and make investments in the business necessary for continued growth."

On the run names Adelphia Communications, Charter Communications, and Nextel Communications firmed up last week on positive market sentiment echoing reports of economic growth and stronger equity and bond markets. Adelphia's term loan "B" ticked up from a 99 1/2 street trade two weeks ago as $5-10 million traded in the 99 1/8 to 99 7/8 range. Roughly $10 million of Charter's "B" term loan traded in the 97 3/8-97 5/8 range compared to the 96 1/2 level three weeks ago. And Nextel's bank debt also perked up as $60 million traded up to the 86 range with $2.5 million pieces trading at 85 1/8 and 85 5/8 by Wednesday last week.

Royal Bank of Scotland Financial Markets is seeking to hire a salesman to focus on selling interest-rate and foreign exchange risk management products to its corporate clients in the Midlands region of England. The hire would tailor instruments such as interest-rate and fx swaps as well as other risk management tools for corporate treasury departments in and around the Birmingham area, which is where the hire will be based, according to an official.

Bear Stearns has hired Fumio Nashiro, principal of equity financial products at Bank of America in Tokyo, as a senior managing director and head of distribution in Tokyo, according to Michel Péretié, senior managing director and head of fixed-income and derivatives for Europe and Asia in London.

Commerzbank plans to add two professionals to its foreign exchange options team, one in New York and one in Singapore. For New York the bank plans to hire a fx trader to deal in the spot and options market for its global proprietary team, said Edward Voorhees, global head of foreign exchange sales and trading in London.

Market professionals, including officials at Deutsche Bank and HSBC, expect the interest-rate derivatives market in Malaysia to bloom in the coming months, on the back of the Malaysia Derivatives Exchange listing bond futures at the end of March. "This has the potential to double the swap market," noted an official at Deutsche Bank. He noted that average monthly trading volumes now range from USD25-50 million.

Sole bookrunner Nomura set the indicative price for the Daido Life Insurance bookbuild at ¥270,000 per share on Mondayn amid general wariness from fund managers about market conditions in Japan and the performance of many of the smaller IPOs in recent months. The domestic roadshow began in Tokyo and the international leg started on February 25. Following release of the formal indicative price on March 4, the bookbuild began on March 5 and closes on March 13. Pricing is set for March 15 and Daido will list on the Tokyo Stock Exchange and Osaka Stock Exchange on April 1.

There were growing signs this week that the Indonesian government is pushing through a series of privatisation deals to capitalise on increasing interest from international investors. Indonesia's bank rescue agency has said it plans to sell its 47.5% holding in PT Metropolitan Kencana, a former Salim Group property company that owns some of Jakarta's most exclusive office and retail space.

Joint lead managers Nikko Salomon Smith Barney and UBS Warburg on Monday priced Japan's third real estate investment trust, which is due to list on March 12. Mitsubishi, the diversified Japanese corporation, and UBS are the joint holders of the Japan Retail Fund Investment Corp. The deal will comprise 52,000 units at ¥470,000, almost the mid-point of the ¥450,000-¥500,000 price range set during marketing. The company has a net book value of ¥41.1bn.