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Market sources said the last step in making a manager switch final on Indosuez Capital Funding IV from Credit Agricole Indosuez to Royal Bank of Canada will require approval from the ratings agencies. "Rating agenices have stopped changes before but on this deal there's no reason it shouldn't go through," said one source close to the deal, referencing the fact that the management team at RBC was the former management team on the old deal. Officials at the rating agencies declined to comment. Sources said the ratings agencies will evaluate the management team, capital available to support the deal, and infrastructure to efficiently handle administration.

Owens-Illinois' bank debt traded up to the 98 1/4-99 range from 97 last week on the lingering rumor of a bond deal. Volume on trades could not be ascertained by press time, but dealers indicate it's small. The debt has moved up from 93 over the month as Owens-Illinois is rumored to be among the companies issuing notes to pay down bank debt. There has been no official company announcement, but the debt continues to get boosted on the rumor. "People are willing to trade on that alone," said a dealer. The Toledo, Ohio-based company is a glass manufacturer. Calls to R. Scott Trumbull, cfo, and the investor relations department were not returned by press time.

Charter Communications' debt traded this week at 981/ 4 in a $2.5 million trade. Dealers cite the company's financial standing and a lack of new issue as the prime reasons for the interest. Matched against the debt of competitors such as Global Crossing and McLeod, which are both trading in distressed range, Charter looks solid, dealers said. Moreover, "There's no new issue and people are dying for paper," said a trader. Another credit pumping up on the low new issue is Adelphia Communications, which traded up to 98 7/8 from 981/ 2 last week. Calls to Kent Kalkwarf, cfo at Charter, were referred to Mary Jo Moehle, director of investor relations, who declined to comment.

Compass Minerals Group's $135 million revolver, a deal which closed nearly two weeks ago and has since become a new favorite in the secondary market, has been assigned a B1 rating from Moody's Investors Service. The debt has traded up to 100 3/4. A market player noted a big appetite for new issue has supported levels and made sellers hard to find despite uncertainties for the company considered in the rating. The rating assignment is due to the effect of weather conditions on demand for road salt deicing, according to Diane Vargas, v.p. and senior credit officer. She notes that mild winters result in earnings fluctuations. Salt deicing comprised approximately 39% of 2000 net sales after shipping and handling and 57% of EBITDA. Vargas also considered the seasonal nature of the deicing business. Proceeds from the credit facility will be used to finance the acquisition of the salt business from IMC Global.

Credit Agricole Indosuez has added two members to its new loan team taking shape under Paul Travers, managing director. Charles Kobayashi and Charles Henneman signed on last week to help build up and expand a new investment management presence at the bank after the departure of Dan Smith and some other key loan players to Royal Bank of Canada two months ago.

Packaged Ice, the largest manufacturer of packaged ice in the U.S., has switched lead lenders to Ableco Finance for a new $88 million credit facility after seeking better terms on the loan. David Goldman, v.p., corporate development, said Ableco is able to offer more flexible terms than the major commercial banks as they are a specialist financing shop. "The specialist financing shops generally have higher fees than the large commercial banks, but the interest rates are comparable," he said. Goldman declined to name the commercial bank, but Capital Data Loanware cites the previous lender as Bank of America. Calls to B of A were not returned by press time.

Emmis Communications bank debt jumped to slightly above 100 from the 97 range on news of an amended credit facility. Dealers reported two $5 million chunks changed hands. Early last week, Emmis announced financial covenant relief that would last until Dec. 1, 2002. The amendments allow for the company's leverage ratio to increase to a total of 8.5 times over the next four quarters. Walter Berger, executive v.p. and cfo, stated that the company is committed to reducing its leverage. Calls to his office for additional comment were not returned by press time. Kate Healey, director of media and investor relations, declined to comment.

Moody's Investors Service has downgraded Enron's senior unsecured ratings to Ca from B2 and confirmed the Not Prime ratings of its commercial paper after the disgraced fallen giant, along with some subsidiaries, filed for voluntary Chapter 11. The downgrade is based on the belief that recovery rates will be low on unsecured claims. Citigroup was the lead arranger for a $3 billion unsecured credit line to Enron, with J.P. Morgan serving as co- arranger.

EOTT Energy Partners has inked an interim $150 million letter of credit agreement with Standard Chartered, as the firm attempts to forge its own credit lines independent of Enron. Enron owns a minority position in EOTT, but has also provided the company with a $1 billion credit line, explained Wade Gates, a spokesman for EOTT. The lease crude purchaser of oil has been seeking a new $300 million revolver for some time, and the decision is unrelated to the developing Enron situation, according to Susan Ralph, treasurer (LMW, 11/19).

Buysiders and traders say the chemical sector has made a quick turnaround in the last couple of weeks, with levels shooting up on a few benchmark names as investors look to deploy extra cash gleaned from paydowns on existing deals. "You can't find chemical paper anywhere," said one loan investor. Lyondell, Equistar, Hercules, and Huntsman International have all jumped significantly as loan investors compete with bond investors for a better relative value on the names.

Bids on McLeodUSA firmed to 74-77 from the low 70s early last week on news that $140 million of the company's revolver would be paid down. Last week the company reached an agreement with Forstmann Little & Co. on a financial restructuring plan. McLeodUSA recently filed a prepackaged Chapter 11 plan. Traders said the significant reductions in bonds and bank debt were driving the levels. "It eliminates some of the debt on the company and means less leverage," said a dealer.

Synthetic collateralized debt obligations using investment grade names as referencing collateral are the structures most vulnerable to fallout from Enron's tumble, according to ratings agencies. Managers of cash flow arbitrage deals, ironically, by and large will avoid being hurt by Enron because they invest in "risky" high-yield bank debt and bonds. Enron was an investment-grade name when its obligations were referenced in default swaps in many synthetic CDOs, and Nik Khakee, analyst at Standard & Poor's, said those deals can expect to feel some pain.