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Federal-Mogul's bank debt traded up three points early last week to 58 in a $5 million trade, despite predictions in the market that a "buy now" push will further depress the sector down the road. While some said they expect a quick bankruptcy exit and a strong recovery for the auto sector, others said zero-percent financing packages will hurt future sales. Calls to Mike Lynch, cfo, were referred to spokeswoman Kim Welch and were not returned.

Westar Capital, a buyout fund, received a hybrid $75 million asset-based facility for the purchase of Igloo Products last month. Michel Glouchevitch, managing director at Westar, said Fleet Capital was a natural choice because of the longstanding relationship the fund had with the bank. "We had familiarity with the bank and knew they had the wherewithal to underwrite the transaction," he said, adding he's pleased with the package that was arranged. "Fleet has a long relationship with Westar and was invited to join," explained Linda Jahnke, senior v.p. at Fleet.

Gaming and travel investors and analysts say they are hard-pressed to find credits they can recommend, as many names are trading at higher prices than they were before Sept. 11. John Maxwell, gaming and lodging analyst at BNP Paribas, says that pricing in the sector reflects investors' willingness to overlook weak operating numbers through at least the first quarter in an attempt to be fully invested by year-end. Given that benchmark credits such as the MGM Mirage 8.375% notes of '11 (Ba1/BB+) were yielding 8.5% last Tuesday, the only two credits in which he sees value are Pinnacle Entertainment and Royal Caribbean Cruises. While Maxwell does not yet have a buy recommendation on Pinnacle, he sees little downside risk in the 9.25% notes of '07 (Caa1/B-), which were trading at 88 last Tuesday. He believes investors have already factored weak operating performance numbers into the price of the bonds. Also, he believes Pinnacle may be looking for a joint partner to fund a property it is struggling to complete in Lake Charles, La. If it were to find such a partner, he says the bonds would trade up five points.

Goldman Sachs' $120 million deal for IPC Trading Systems garnered positive support last week, with one banker commenting on the tiny $15 million revolver, noting "this is what the market wants." Commitments to the $105 million "B" term loan could not be ascertained, as Goldman officials did not return calls. Pricing on the deal is LIBOR plus 41/ 2%, said a banker, and there is call protection at 102 and 101 in the first two years.

Allstate came to market at the end of last month with a $300 million collateralized debt obligation with leveraged loans representing the majority of the structure's collateral. A banker close to the deal said the vehicle, AIMCO 2001-A, is structured as an asset management deal--a traditional cash flow arbitrage structure. Calls to Allstate were not returned by press time.

Leap Wireless' bank debt jumped a few hurdles last week and traded up to 78 from the 74 range in a series of trades totaling close to $100 million. Goldman Sachs reportedly traded a majority of the total. The telecommunications carrier is based in San Diego. Calls to spokeswoman Sarah Thailing were not returned by press time.

Merrill Lynch's latest spate of personnel cuts has dealt a severe blow to its attempt to remain a formidable high-yield trading and underwriting operation, say senior buy- and sell-side high-yield executives. Many speculate that a lack of familiarity with the junk sector among senior management, coupled with sharp losses in its trading book, have been the basis for its rapid pullback. Indeed, former Merrill high-yield officials are said to be telling competitors that Merrill's high-yield losses will total more than $50 million this year alone.

Two auctions last week $20 million sales of each produced Huntsman Corp.'s pro rata paper, pushing levels up from the 66 range to 69. Dealers noted the surge in levels from 50 a month ago, but were unsure of what's supporting the levels other than the recent bond deal announcement by Lyondell (LMW, 11/25). J. Kimo Esplin, cfo of Huntsman Corp., could not be reached by press time.

Allied Waste's "B/C" continues to trade in the 99 range on news of a bond deal that will pay down the company's bank debt. The estimated volume last week was $20 million. Late last month, the company announced a $750 million bond deal that would pay down a portion of the company's $7 billion deal. Allied Waste is a trash-hauling company based in Scottsdale, Ariz. Calls to Thomas Ryan, cfo, and Mike Burnett, head of investor relations, were not returned.

Merrill Lynch has laid off two high-yield analysts, and reassigned a third. Mike Plancey, a v.p. who covered the paper and forest products sectors confirms that he has been let go. He says he is looking at opportunities on the buy-side. He was at Merrill for five and a half years. Eric Matejevich, a gaming analyst and v.p., declined comment, but a high-yield official formerly at Merrill confirms he was laid off and says Matejevich is also looking for opportunities on the buy-side. The official says Jonathan Savas, a director and wireline telecom analyst, has moved to an unspecified position within another department at Merrill. Savas did not return calls. Clare Schiedermayer, head of high-yield research, did not return calls.

Following a hefty oversubscription, Credit Suisse First Boston and Bank of Nova Scotia flexed pricing for the six-year $172 million Weight Watchers International "B" term loan. A banker following the deal said, a 1/2% flex was put in last week. The credit was already priced at a trim LIBOR plus 3% pre flex, with bankers citing the improved profile of the once highly-leveraged company following a successful initial public offering in November and repayment of bank debt via a bond issuance. The new "B" will refinance existing debt, priced at LIBOR plus 4% (LMW, 12/10).

As much as $100 million of Enron Corporation's bank debt traded last week in the 22-23 range as vultures continue to pick at the paper. Both Goldman Sachs and Deutsche Bank were rumored to have moved large pieces over the week, although officials at both shops declined to comment. It could not be determined whether the desks were selling off their own exposure or acting as brokers. An estimated $200 million of Enron bank debt has traded over a two week span, according to dealers. Levels have stayed in line with the bonds and have not moved much in that time.