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CoreComm is attempting to expand its J.P. Morgan-led credit facility after deleveraging the balance sheet through an exchange of debt for common stock. An official with the company, who declined to be named, said CoreComm is currently in talks with J.P. Morgan to increase the $156.1 million facility, though he would not say by how much. The credit facility expansion is part of an ongoing process to recapitalize CoreComm. The official declined to comment on whether the facility will be used to pay down bonds or other debt securities.

Dynegy bank debt swooned from par to 85 last Tuesday shortly after its debt was downgraded. By week's end some traders said bids had edged back up to the high 80s, but players were taken aback by the initial drop. "[Fifteen points] is a pretty big hit," a dealer said, noting the credit had consistently been a par name. Moody's Investors Service notched the debt down to Baa3 from Baa2 because of concerns over power sector pricing pressures, and Dynegy's legal tussle with Enron following the failed takeover.

Global Crossing bank debt skidded down to the high 20s last week, from the 34 range, on speculation the company will file for Chapter 11 protection. As LMW went to press late last week, there were no reports of a filing. Approximately $20 million traded over the week in a number of small trades, according to some, although one dealer questioned whether that much had moved. J.P. Morgan and Goldman Sachs are reportedly active in the name, but officials at both shops declined to comment. Calls to Dan Cohrs, cfo, were not returned. Spokesman John Schmidt declined to comment on trading levels and the company's financial position.

Brian Hannon, a senior high-yield trader, has left Bear Stearns, according to another trader there. A senior high-yield trader at a rival firm says Hannon was laid off because, though he had been there for several years, he had been there for the shortest tenure among Bear Stearns' senior high-yield traders. He says Hannon traded cable, energy and some telecom credits. Hannon, who worked at Scotia Capital Markets prior to joining Bear Stearns, could not be reached. Art DeGaetano, head high-yield trader at Bear Stearns, declined comment.

Washington, D.C.-based MeriStar Hospitality, the owner of upscale hotels, is paying off its term loans "A" and "B" with a $250 million senior note offering to replace the bank debt with less restrictive longer-term debt. Bruce Riggins, director of finance said the company is making a move because, "bank debt is more restrictive in terms of covenants. The consequences of 9/11 made MeriStar out of compliance and at the mercy of the banks in terms of fees and going after collateral." He explained the goal was to reduce bank debt to 10-15% of total debt. "They [the bank group] are understanding, but had an opportunity to make money through non-compliance. The risk was of being at the banks' mercy," Riggins reiterated.

Mosaic Group extended the maturity of its credit facility to 2004 and reduced the commitments as the company anticipates a tougher market. "It just cleans and tidies things up in this environment," said Ben Kaak, executive v.p. and cfo. He explained that the company wanted to extend the maturity in light of what could be a tough market in the next couple of years. In exchange, Mosaic's deal was reduced to $300 million from $400 million and the pricing was increased to 215 basis points over LIBOR. Pricing had been 140 basis points over LIBOR.

NationsRent's debt was quoted in the mid-50s following an announcement early last week that the company had filed for Chapter 11 protection. The company announced last Monday that it had filed in an effort to restructure its debt. The company also obtained $55 million of debtor-in-possession financing led by FleetBoston Financial. Ezra Shashuoua, cfo, did not return calls for comment. Mark Baker, spokesman, confirmed that the company is restructuring its debt. "They have not filed a plan with the court. However, they're working closely with the banks on that and in due course will submit it to the court," he said.

Oaktree Capital Management, one of the most well-known high-yield and distressed debt money managers in the industry, is considering launching a $500 million to $2 billion add-on fund to its $2.5 billion distressed debt fund, according to BW sister publication Money Management Letter. The fund would consist of a mix of loan and bond assets from issuers that have tanked. Howard Marks, chairman of the Los Angeles-based firm, says it is considering the move because of the recent uptick in defaults and bankruptcy filings due to the weak economy. The first fund's closing was on Sept. 28 with $1.5 billion, and its second closing will be Dec. 20 with an additional $1 billion. About 20% of the existing assets in the fund come from foundations and endowments, says Marks. The minimum investment would be $3 million and the annual management fee would be 1%.

Oaktree Capital Management, one of the largest distressed debt money managers, will be shopping in the secondary loan market for distressed credits in the new year now that the firm completed raising a little over $2.1 billion for the final closing on its OCM Opportunity Fund IV. Howard Marks, chairman of the Los-Angeles-based firm, said it is looking for bargains in a volatile market. Marks declined to be specific about credits the fund is eyeing, including Enron and other well publicized distressed names. The increase in available distressed deals as a result of bankruptcy filings makes it a good time for the fund to invest, he said. A percentage of the fund will invest in high-yield bonds as well as loans, but Marks said it's impossible to determine percentages in advance. Future market conditions will determine the breakdown.

The condition of Captain D's bank loan is concerning rating agencies as a $135 million Bank of America led facility has not yet been refinanced and arrangements have not been made to extend the maturity of the credit, despite the fact the loan matures at the end of this month. Moody's Investors Service has put the senior unsecured bank loan rating on review for downgrade and Standard & Poor's has downgraded the corporate credit ratings on the expectation the loan should have been refinanced by now. S&P has the corporate credit rating hovering at CCC. Moody's has the loan at B2, recognizing the secured bank debt would achieve substantial recovery. Captain D's is a Nashville, Tenn.-based seafood restaurant chain.

U.S. Can's bank debt ticked down last week in a small trade to 81-82 from the 86 range. Size estimates were $5 million. The credit was in the 93 range prior to the company announcing it would be seeking an amendment. Dealers said the company's amendment was approved two weeks ago, but with limited fanfare. "I think lenders were expecting more money from the equity sponsor [Berkshire Partners]," a dealer noted. The Lombard, Ill.-based company makes steel and plastic in the U.S. and Europe. Calls to John Workman, cfo, were not returned. Diane Steel, spokeswoman, declined to comment.