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Credit Suisse Asset Management, which manages €7.5 billion in European fixed-income assets from its London office, has taken profits on telco, auto and cyclical paper to make room for new issuance.John de Garis, head of CSAM's European fixed-income team in London, declined to detail the credits he sold.

Chelsea Management Co. is looking to swap out of $30-$50 million in U.S. agency debentures with maturities of over 10 years that are callable in two- to three-years, in order to purchase similar-yielding agencies with maturities of less than 10 years. Tom Techentin, portfolio manager of $375 million in taxable fixed-income, says what he believes is a rising interest rate environment diminishes the value of the longer duration paper. Chelsea will look to swap bonds of a wide variety of agencies, but some examples include Federal Home Loan Bank 6.75% debentures of '16 and 6.5% debentures of '16. The firm will also look to sell Federal National Mortgage Association 6.37% debentures of '14, says Techentin.

Investors and analysts are beginning to wonder for how long the sterling corporate bond market can sustain its rally in light of recent negative credit events, such as the Enron bankruptcy. "This has been an incredible rally. But you have to ask when it is going to stop. We've seen a huge sovereign default [Argentina] and several corporate defaults. If this continues, we are going to see fundamentals deteriorate rapidly," argues Andrew Burton, credit analyst in the Royal Bank of Scotland's financial markets division in London.

A survey conducted by New York based fixed-income recruiter Anastasia Carroll, based on responses from bond executives at 56 buy- and sell-side firms, concludes that the strongest job demand is likely to be for those versed in structured finance and debt origination this year. Perhaps most importantly to bond market players, the majority of respondents are looking to use the balance of the first quarter to build up their departments. She speculates that this will be easy, given the amount of dislocation still prevalent after the spate of mergers in 2000.

Cleveland-based LESCO, a provider of products for the professional turf-care market, has refinanced its debt and secured a $122 million asset-based credit with PNC Bank. "LESCO was in violation of covenants on the old agreement and had forebearance through March," said Breck Denny, cfo of LESCO. "The lousy economy and Sept. 11 caused LESCO to violate," he said. "The primary culprit was a fixed-charge ratio." The company has been working since October to solve the problem with the existing deal, he added.

Investment grade issuance for January came in at $55.5 billion, which was at the high end of analysts' estimates. Supply has been primarily concentrated in higher quality names, with AAA and AA borrowers accounting for over 2/5 of year-to-date issuance. Lower-rated borrowers have disappeared from the calendar in the past two weeks as post-Enron accounting concerns have increased spread volatility significantly in the BBB ratings bucket. The roller-coaster ride in Tyco spreads and the sell-off in Williams, WorldCom and other affected credits deterred any but the highest rated issuers from accessing the markets. That said, prior to the last two weeks the high yield calendar was very robust, with almost $9 billion in junk-rated issuers tapping the market. The Investment Company Institute released its preliminary figures for 2001 flows, which came in roughly in line with expectations. For the first time since 1998, flows into taxable fixed income bond funds exceeded flows into stock funds. The total for bonds for the year was about $75 billion compared with $33 billion for equities.

Investment grade issuance for January came in at $55.5 billion, which was at the high end of analysts' estimates. Supply has been primarily concentrated in higher quality names, with AAA and AA borrowers accounting for over 2/5 of year-to-date issuance. Lower-rated borrowers have disappeared from the calendar in the past two weeks as post-Enron accounting concerns have increased spread volatility significantly in the BBB ratings bucket. The roller-coaster ride in Tyco spreads and the sell-off in Williams, WorldCom and other affected credits deterred any but the highest rated issuers from accessing the markets. That said, prior to the last two weeks the high yield calendar was very robust, with almost $9 billion in junk-rated issuers tapping the market. The Investment Company Institute released its preliminary figures for 2001 flows, which came in roughly in line with expectations. For the first time since 1998, flows into taxable fixed income bond funds exceeded flows into stock funds. The total for bonds for the year was about $75 billion compared with $33 billion for equities.

Banc of America Securities will be talking to investors this week preparing the groundwork for the $275 million credit backing Accredo Health's $415 million purchase of the specialty pharmaceutical division of Gentiva Health Services. Buysiders believe the paper will be very desirable, as it falls into a hot sector. In addition to the sector being highly attractive, slow new issuance has left investors scrambling for allocations on certain choice deals this year.

Citigroup's project finance team is attempting to organize key project finance lenders into pooling portfolio data to present to the Basel Committee this month to prove to the Swiss-based body that project loans have significantly higher recovery rates than those on corporate loans. "The accords may be five years away, but the earlier you start, the more of a jump you have on the situation," said one project finance banker, noting, "clients and banks should be worried. If they [The Models Task Force] rate the project finance loans as junk, the pricing will go through the roof," he added.

Crédit Agricole Indosuez (CAI) is making a major push into the European fixed-income market aimed at increasing its presence in the corporate, government and asset-backed credit markets as well as becoming a key credit derivatives player. "We don't want to be a bulge bracket firm, but a major player in terms of credit, complex credit derivatives and risk management," Thierry Sciard, global head of fixed-income in Paris, told BW.

Deutsche Bank released its two veteran co-heads of U.S. fixed-income credit research, Paul Tice and Mark Girolamo, late Wednesday. David Folkerts-Landau, Deutsche Bank's London-based global head of markets research, said "[Tice and Girolamo] are very nice guys, and they worked hard here, but we terminated them because we need truly strong leaders in all facets of research management, and they just didn't fit the bill."

Toronto-based Aber Diamond secured a $230 million loan to fund capital commitments for the Diavik Diamonds Project, the largest ever dedicated project finance facility for a diamond project. Aber tapped Bank of Montreal, CIBC, Deutsche Bank, Export Development Canada and Royal Bank of Canada, said Caroline Glasbey, director for investor relations. Bank of Tokyo-Mitsubishi subsequently joined the lead bank group underwriting the loan, which syndicated the facility to another eight players.