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Betting, and losing... again. In the wake of revelations that an Allied Irish Bank subsidiary was dealing with a $750 million fraud in its foreign exchange department, The Sun reports that rogue trader Nick Leeson, who brought down the historic Barings Bank through fraudulent futures contracts, was heard to have bet someone recently it could never happen again. Hopefully, this time he was betting with his own money.

The Deal Roll-off Chart, provided by Dealogic, lists the 50 largest leveraged credit facilities in the U.S. market that are due to mature in the coming month. It is designed to provide a look at potentially available money in the market as credits are renewed or retired.

Pioneer Investments, which manages EUR9 billion in European credit and government bonds, will add France Telecom and Deutsche Telekom step-up coupon bonds when the recent volatility in these securities decreases. On the back of recent uncertainty over potential downgrades, asset disposal programs and debt refinancing, these companies' bonds have widened 10-30 basis points, depending on name and maturity, says Raffaele Bertoni, portfolio manager. "It's difficult to predict the limit of the widening; it depends on the further news on asset disposals--for example, how France Telecom will finance Mobilcom debt," he adds. Once a clearer picture emerges, the firm will pick up shorter-dated step-up coupon bonds, he says. FT's 6.75% step-up of '08 was trading 155 basis points over swaps last Tuesday, while DT's 5.75% step-up of '06 was trading at about 115 over.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

SunAmerica Asset Management will buy $30-70 million in Ginnie Mae 8% bonds in an effort to pick up yield without taking on additional credit risk. It will sell Ginnie 6% notes. Michael Cheah, portfolio manager of $2 billion in taxable fixed-income, says he will look to make the trade within three months, by which time he believes the market will have stabilized. Until that time, he expects 10-year U.S. Treasury yields to trade within a range of 4.65-5.20%. Although many portfolio managers have been adding corporates or moving down in credit-quality on the expectation that the economy will improve, Cheah says he is worried that the possibility of additional Enron-style accounting difficulties makes corporates too risky a bet. He believes the economy is in worse shape than the real fourth quarter GDP growth of 0.2% suggests, since nominal GDP contracted by 0.1%. Among mortgage-backed securities, Cheah favors Ginnies because they have an explicit government guarantee. He also notes that at a spread of 135 basis points over Treasuries, they trade wide of double-A corporates, which were at 128 basis points over Treasuries last Monday.

Sequa, a diversified manufacturing and technology company, has cancelled its $75 million revolver ahead of the October 2002 maturity and is now seeking a new facility. The J.P. Morgan-led credit was terminated because Sequa did not expect to be in compliance with certain financial covenants of the revolver, said Linda Kyriakou, spokeswoman for Sequa. Kyriakou declined to comment on the level of borrowings on the revolver at time of cancellation.

The Government of Singapore Investment Corporation (GIC), as part of its efforts to grow its global fixed-income team, is looking to hire an experienced corporate bond trader for its London office, according to an official familiar with the plans. The new hire will work with senior portfolio managers as well as credit and market analysts to develop analytical tools and give analysis on the primary and secondary fixed-income markets. GIC, which manages $100 billion, has offices in New York, Tokyo, Hong Kong, Beijing and San Francisco. Calls to Walter Schabel, head of the London office, were not returned.

Fitch Ratings has downgraded Williams Communications Group senior secured credit facility to CCC+ from B, with the rating on negative watch, spurred by sluggish demand for broadband services and depressed asset values securing the credit facility. The action also reflects concerns over the company's slower than anticipated revenue ramp-up, EBITDA generation and improvement in credit protection metrics. The rating watch is likely to be resolved pending the outcome of a bank group discussion over capital and covenant structure. A Williams' statement notes the downgrade is driven by current uncertainty surrounding the telecom industry.

Société Générale is planning a securitization of project finance loans, looking to join only Credit Suisse First Boston and Citibank as banks that have managed to execute project finance-backed collateralized loan obligations. The bank is looking to bring the deal to market within the next few months, according to Power Finance & Risk, an LMW sister publication. SocGen officials declined comment, so the geographical and sectoral mix of the loans could not be determined.

Toronto Dominion is said to be leading a $200 million credit backing Spectrum Equity's $345 million acquisition of Broadwing's Cincinnati Bell Directory business. Bankers at TD did not return calls and timing and pricing could not be determined. The company being formed by Spectrum for the directory business is called CBD Media. Calls to Randy Henderson, cfo of Spectrum in California, were not returned. Spectrum is the latest phone directories business dialing up the loan market, following the Yell Group's acquisition of McLeod USA's telephone directories business last month. CIBC World Markets is set to launch syndication of that credit (LMW, 1/21).

Tyco International and its lending subsidiary Tyco Capital/CIT Group drew down bank credit lines after exiting the commercial paper market to make the international conglomerate less susceptible to rumors in the financial markets. "The drawing down on the bank lines makes us [Tyco] less susceptible to various market rumors, including those that say we have liquidity issues, which if left to grow could become a self-fulfilling prophecy," said Dennis Kozlowski, Tyco's chairman and ceo in a conference call to reassure analysts.

Global Investment Advisors has closed a $1 billion synthetic collateralized debt obligation, marking the first managed synthetic deal the firm has done. David Ellis, managing director, explained the firm has done managed collateralized bond obligations in the past with cash flow arbitrage structures, but with recent volatility in the markets the firm opted for a synthetic transaction this time around. "With growth of credit default swaps it adds liquidity to markets where often there's very little efficiency on certain names." Ellis noted that the ramp up time is faster on synthetic names as well compared to shopping for particular assets.