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The wave of corporate refinancings that is knocking off short-term debt with bond deals is having a ripple effect in the secondary loan market, where staple names are firming as other paper is retired. Last week, Lyondell Chemical Company announced plans for a $750 million bond deal that would take out some of its bank debt, making it the third company in two weeks said to be coming to market with a bond deal to replace existing bank debt. Most of the paper will be paid back at par or better so there is short-term upside. But chunks of bank debt are leaving a market that has not had significant new issues for three months.

Chris Johnson, chairman of global leveraged finance at Merrill Lynch, has taken the voluntary package being offered by the firm to employees worldwide designed to trim costs in the bear market. Jessica Oppenheimer, a spokeswoman for Merrill, confirmed he is no longer with the firm, but declined comment on any other departures. Johnson was unavailable for comment.

Owens-Illinois' term loan traded up to the high 97 range from the 95 range early last week on the rumor of a potential bond deal. Dealers reported the trading volume was small, and the bond issue rumblings could not be confirmed. "It's just word going around the market. People are willing to trade on the momentum," a dealer said. The revolver was quoted at 92 early last week. Owens Illinois is a glass manufacturer based in Toledo, Ohio. Calls to R. Scott Trumbull, cfo, were not returned. A spokeswoman also did not return calls by press time.

Casey Walsh, the co-head portfolio manager responsible for Prudential Financial's more than $8 billion in high-yield assets, has resigned effective Dec. 31. Paul Appleby, who had been co-head of high-yield with Walsh, will now be the sole head. Mike Collins, a high-yield credit analyst and strategist at Prudential, will assume Walsh's portfolio management responsibilities. Walsh did not return calls placed with his secretary as of press time last Wednesday of the holiday-shortened week.

The high-yield trading, sales and research arm of RBC Capital Markets will to move from its current location in Greenwich, Conn. to company offices in Purchase, N.Y., according to Dan Elkaim, head of high-yield sales. He says the high-yield group is making the move to unite high-yield sales and trading with a newly hired leveraged finance group from Indosuez Capital led by Kenneth Kencel that is operating out of Purchase. Another change precipitated by the addition of Kencel's group is that Max Holmes, who had been head of high-yield origination, will now work with the leveraged finance group.

Houston-based Reliant Resources tapped relationship banks for a $2.2 billion, 364-day bridge loan to finance the planned purchase of Orion Power and will be replacing the loan with a bond deal and bank debt next year. Bill Waller, assistant treasurer for Reliant Resources, said Bank of America, Barclays Bank and Deutsche Bank lead a club of 10 banks providing the loan and the banks will get a piece of the bonds. "It was very much relationship driven. Reliant Resources conducted a competitive process among the relationship lenders," he added. Pricing and terms were the primary factors, he added. Reliant Resources provides electricity and energy services.

J.P. Morgan's $325 million credit for Revlon Consumer Products has been described as challenging by bankers, who cite the company's poor performance and decline in revenue amid a market making a flight to quality. A banker said the company is facing problems and many banks are reluctant to invest in single-B credits right now. The deal, however, is likely to be completed with existing lenders recommitting, albeit reluctantly, he added.

Street bids for Xerox Corporation's bank debt notched up to 84 3/4 on an announcement by the company that it will return to full-year profitability in 2002. One dealer reported heavy volumes of trading in the 85-86 range last Monday, but he did not indicate a figure. Bid-offer range was quoted as 85-88 on Tuesday. "The spread is wide because people are not sure where it's going to pan out. They toss up a two or three point gap and see if anybody bites," a dealer said, adding that Xerox's projection estimates are being received either way. "The market's just very cautious right now," he said. Calls to Barry Romeril, cfo, were referred to spokeswoman Christa Carone, who declined to comment.

A $5 million chunk of Burlington Industries' bank debt was swapped in the 65 range just ahead of the Holiday week following news that the company has filed for Chapter 11. Dealers report that the credit had been in the 70 range prior to the last trade. Since Burlington filed for bankruptcy, the bid offer spread has dipped to 63-67. The company makes fabrics for both the apparel and home-furnishing sectors and is based in Greensboro, N.C. Calls to Charles Peters, cfo, were not returned. Karyl McClusky, spokeswoman, declined to comment.

Citigroup two weeks ago launched syndication of a $2.75 billion refinancing for International Lease Finance Corp. that included a $1.5 billion, 364-day revolver and a $1.25 billion facility with a three-year maturity. Market sources said banks are committing to the deal that has raised eyebrows due to its association with the airline industry as a provider of aircraft operating leases. Citi is reportedly pitching allocations in the amounts of $300 million, $250 million, and $150 million. Reportedly, some firms have taken top slots. Calls to Citigroup syndication officials and Alan Lund, ILFC cfo, were not returned by press time.

Jeff Maillet and his four-person team have joined FrontPoint Partners after departing Nuveen Investments last month, and are preparing to launch a distressed debt fund. Eileen Rives, Gregory Bunk, Lisa Mincheski and Steven Hill, have joined the Greenwich, Conn.-based firm, which has plans down the road for collateralized debt obligations and a slew of loan investment strategies. Philip Duff, the former ceo of Van Kampen Investments and now partner and chairman at FrontPoint, said the new fund will be a "classic distressed debt product" with three parts: distressed workout situations, value investing, and an intra-capital structure using arbitrage. Calls to Maillet were referred to a public relations agency for FrontPoint and were not returned.

Cone Mills Corporation, a denim fabric producer based in Greensboro, N.C., was able to extend its credit facility by downsizing the deal and accepting a new structure pitched by lead bank Bank of America.Scott Wenhold, v.p. and treasurer, said the company's new $68 million facility will replace its existing $73 million facility. "The structuring of the facility is quite different and it benefits both of us. Banks want to reduce credit exposure to the company and from our standpoint things won't get better until we pay down debt and restructure our balance sheet," said Wenhold.