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Mike Smith,Merrill Lynch's last trader who focused exclusively on high-yield, walked off the desk last week, according to a member of the firm's high-yield department and several traders at rival firms. It could not be determined who was assuming Smith's duties. Smith could not be reached. Jeff Chandler, Merrill's new head of high-yield, declines comment on Smith. Rivals say that distressed trader Eric Dobbin was made head high-yield trader to fill the void, but Chandler insists that Dobbin has been responsible for distressed and high-yield bond trading since last late year, and that neither his title nor responsibilities have changed. Dobbin referred calls to Chandler.

Moody's Investors Service has given CSG Systems' $400 million secured bank loan a Ba2 rating as the agency has positive expectations for CSG's ability to turnaround newly acquired, Kenan Systems. Richard Baldwin, analyst at Moody's, said the company is planning a big commitment to Kenan which was the billing software division of Lucent Technologies. Baldwin explained that the company has lost 80% of its value since it was acquired by Lucent in 1999. "It remains to be seen if Kenan has been so damaged that it can't be turned around," said Baldwin, adding, "If it's possible, the management of CSG can do it." Calls to officials at CSG were not returned by press time.

Moody's Investors Service has made three additions to its London-based structured finance and insurance teams. Andrew Farr, the agency's in-house recruiter for the structured finance group, says the new structured finance hires are in response to increased deal flow in the sector. He adds that the group, which is now 87-strong, should break the 100 barrier this year. "Our numbers are swelling," he says, noting that the most recent additions have been to the commercial mortgage-backed securities group and the structured investment vehicle group.

Morgan Stanley and Credit Suisse First Boston two weeks ago launched syndication of a refinancing deal for Graphic Packaging International. The $450 million bank deal consists of a $300 million, five-year revolver and a $150 million six-year "B" term loan. Pricing on the revolver is LIBOR plus 2% with a 1/2 % commitment fee, and LIBOR plus 3% on the institutional tranche. Golden, Colo.-based GPI is also offering $250 million in subordinated notes. The credit refinances a $325 million, five-year term loan and a $400 million revolver. Bank of America is the agent on the existing lines. Questions to CFO Luis Leon were referred to Paddy Broughton who declined to comment.

Nomura International is developing a fixed-income underwriting business in North America and is looking to hire a banker to fill the newly created position of head of North American debt capital markets. Stefano Ghersi, London-based global head of DCM and to whom the new hire will report, says previously Nomura only had an informal fixed-income underwriting effort in North America. Now, as part of its global fixed-income push, the region will play a key role in the firm's expansion plans, he said. The firm is looking to recruit a major player from a top firm to lead the effort.

Rogers Cable, a subsidiary of Toronto-based Rogers Communications, has closed on a new seven-year $1.075 billion credit line and upsized a $300 million note offering to $450 million, despite the parent company already having a heavy debt profile. Debt to EBITDA is now at four to one and the new $450 million note offering will prepay $300 million in notes due this year, said Eric Wright, manager of investor relations for Rogers. The credit line will also repay existing debt and fund capital expenditures, he added. Standard & Poor's believes the debt load to be heavy, driven by the capital-intensive nature of cable television systems, but the stable valuation of the systems offsets this. The senior secured loan is rated Baa3 and BBB-, said Wright.

Last week $40 million of Williams Communications traded following financial concerns surrounding the name. Traders said Bank of Montreal sold $20 million of the name. Other dealers could not be determined by press time. The debt is currently trading in the 60-63 range, down 10 points over this year.

Tesoro Petroleum will return to the bank market for financing to back the $945 million acquisition of the Golden Eagle refinery from Valero Energy. Tesoro will also purchase the value of inventory, estimated to be $130 million. Lehman Brothers is leading the financing, which will result in $375 million in term loans, a $70 million revolver, $450 million of subordinated debt and up to $250 million equity component. The financing will be done "as soon as possible," said a banker, unable to provide more precise timing. Bankers at Lehman did not return calls. A Tesoro spokeswoman confirmed Lehman is leading the deal, but declined further comment.

Market volatility dominated the week and put a damper on the new issue market with only $2.9 billion in new deals being priced. With investors focused on the volatility in Tyco, WorldCom, Household Finance and other benchmark corporate bond borrowers there was little appetite for BBB names or risky names. In fact, Computer associates (Baa1/BBB+) pulled a plan deal from the market when Moody's put the companies rating on watchlist for a downgrade. That said, there appears to be money to put to work for very high quality borrowers as shown by the $400 million 10-year deal for AA rated Kimberly-Clark, which was sold in less than an hour. Emerging markets had a rare debut borrower as Peru (Ba3/BB-) came to market with $1.43 billion 10-years priced at +455 basis points over Treasuries. About $500 million of the new deal was for cash and the rest was used for liability management to retire Brady bonds. The cash portion was significantly oversubscribed with a reported $1.7 billion in demand.

Market volatility dominated the week and put a damper on the new issue market with only $2.9 billion in new deals being priced. With investors focused on the volatility in Tyco, WorldCom, Household Finance and other benchmark corporate bond borrowers there was little appetite for BBB names or risky names. In fact, Computer associates (Baa1/BBB+) pulled a plan deal from the market when Moody's put the companies rating on watchlist for a downgrade. That said, there appears to be money to put to work for very high quality borrowers as shown by the $400 million 10-year deal for AA rated Kimberly-Clark, which was sold in less than an hour. Emerging markets had a rare debut borrower as Peru (Ba3/BB-) came to market with $1.43 billion 10-years priced at +455 basis points over Treasuries. About $500 million of the new deal was for cash and the rest was used for liability management to retire Brady bonds. The cash portion was significantly oversubscribed with a reported $1.7 billion in demand.

Allied Irish Bank's surprise announcement last week that a rogue foreign exchange trader had racked up $750 million in losses, has European bank analysts worried that spreads will widen dramatically throughout the sector. Just after the losses were announced, AIB's tier-one bonds widened by roughly 45 basis points to 200 basis points over German bunds. "There is a risk of contagion to firms closely associated with investment banking and with derivatives trading exposure," says Olivier Szwarcberg, a banking analyst at Bear Stearns in London. As of last Thursday however, only a few banks had been affected. Bonds of Standard Chartered widened out by 10 basis points, while Fortis Bank and Bank Of Ireland were trading up to 12 basis points wider at LIBOR plus 166 and 156 basis points, respectively.