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The March 31 fiscal year end for Japanese banks was said to be the driving force behind a $10 million auction for Crown Cork & Seal's bank debt held last Thursday. "The Japanese banks are just looking to purge [underperforming credits] right now," a banker noted. On Thursday the debt traded slightly higher than 85, a surprise to some since it had been offered in the 84 range. "There's strong bids in the distressed market right now," a dealer said. "At the end of the year, most want to sell, which pushes prices down. People then want to buy back at the beginning of the year." The same seller also reportedly held a $37 million auction for Pacific Gas & Electric paper, trading it at 96 1/2.

Investment banks without ties to commercial banks held their own against those firms that usually benefit from the commercial banking relationships of their parent companies. In what was a record year for investment-grade bond underwriting business, David Hendler, an analyst at independent fixed-income research firmCreditsights, argues that the dealer subsidiaries of large commercial banks, in particular Banc of America Securities, should not be so quick to claim victory in their battle to win underwriting business.

Extended Stay of America amended its $900 million credit facility last month to temporarily allow for higher leverage. Gregory Moxley, cfo, explained that the company wants to be positioned for growth projects in 2002 in anticipation of a stronger economy in 2003. "By temporarily raising the total leverage, it will give us the ability to accelerate our development," he said. According to the covenant amendments, the allowable maximum leverage multiple has been increased from 4.75x to 5.25x EBITDA. In the second quarter of 2003, leverage will go back to its original limit. The Spartanburg, S.C.-based company offers extended stay lodging services.

American Tower's bank debt last week climbed into the 95-96 range, up from 94 in late December. The uptick brings the debt closer to where it was in early December before it slipped from 96 1/2. A dealer reported the paper was offered in the 98 range last Wednesday, but there were no bids. Traders explained that paper can be offered as high as the seller wants, but what drives pricing are the bids. Dealers are awaiting first quarter numbers to make any calls on the company, but some are wary of its aggressive buildout as other telecom names stumble. But some players remain optimistic. "People worry about [the buildout], but they've got plenty of cash on hand," said a dealer. "As cell phone use increases, there's going to be more tower use. So they're in good shape."

Credit Suisse First Boston this week is launching syndication of a $300 million bank deal for Laboratory Corp. of America Holdings and a handful of banks have already taken lead roles. Wachovia Securities, UBS Warburg, Bank of America and Deutsche Bank are syndication agents for the BBB rated senior unsecured credit. Split between a $100 million, 364-day revolver and a $200 million, three-year revolver, the spread is LIBOR plus 1%. There are 12.5 basis points and 17.5 basis points available as facility fees for the respective revolvers, said a banker.

Bank of America is set to syndicate a $75 million credit facility for Atlanta-based The Profit Recovery Group. The loan will be used to fund the merger and integration costs emanating from the planned acquisition of Howard Schultz & Associates, said Leslie Kratcoski, director of investor relations for Profit Recovery. Bank of America supplied the previous credit line, she said. The old facility has now been cancelled, she added with a charge of $2.6 million. The company provides recovery audit services. Kratcoski could not comment on the pricing or timeframe for completion at press time.

Bear Stearns has eliminated six fixed-income analysts from its London-based European research team, saysJohn Knight, a firm spokesman, declining further comment. Three of the layoffs were made in high-grade research while the rest were made in high-yield. Among the analysts let go was Graham Neilson, fixed-income strategist. His responsibilities have been assumed by Alexander Popov, a junior analyst. Philip Crate, head of European fixed-income research, was on holiday and could not be reached for comment.

Brown Shoe Company closed a $350 million secured revolving credit facility in late December, replacing more expensive bond debt and getting increased liquidity. Andy Rosen, cfo, explained that the company retired a bond deal with a coupon of 91/2 %. The new debt has a floating rate and starts at LIBOR plus 2% to 21/2 % based on a grid. The St. Louis-based company sells footwear worldwide. It markets brands like Naturalizer, LifeStride and Buster Brown.

Charter Communications' bank debt traded up slightly to

Anaheim, Calif.-based CKE Restaurants is closing a new $100 million credit facility at the end of January, a drastic reduction from the almost $500 million facility closed in 1997. Debt was incurred to finance the acquisition of the Hardee's food chain by Carl's, a part of the franchise, said Dennis Lacey, CKE's executive v.p. and cfo. "Hardee's was somewhat troubled, but they [Carl's] felt they could turn it around. But Hardee's continued to bleed and there were violations of the bank debt and noncompliance," he added. Covenants were waived so CKE was never in default, but to reduce leverage stores were sold including Hardee's and other restaurants, he said.

Credit Suisse First Boston has increased the pricing on its deal for Washington Group International after investors cited it as a storied credit that is a tough sell. The spread is now up to

Deutsche Bank has hired Chris Johnson for the newly created position of senior leveraged finance originator, according to firm spokesman Ted Meyer. Johnson was formerly chairman of Merrill Lynch's global leveraged finance group, where he had spent 14 years within its high-yield unit. He resigned in early December as Merrill has undergone a sweeping reorganization of its once prominent operation (BW, 12/17). Johnson will be a managing director, although his reporting lines are in the process of being finalized, according to Meyer, who speculates that he will most likely fall under the command of global leveraged and structured finance chief Rich Byrnes. Meyer says his role will be to expand DB's high-yield client roster. He started several days before Christmas. A call to Merrill spokeswoman Jessica Oppenheim was not returned as of press time.