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Moody's Investors Service downgraded the senior unsecured debt ratings of Phelps Dodge to Baa3 from Baa2, reflecting the constraints of the company's operating performance and financial flexibility. In light of this, the ability of the company to meaningfully reduce debt levels, improve coverage ratios and restore its balance sheet to historic strengths will be stretched out over a longer time frame. Headquartered in Phoenix, Ariz., Phelps Dodge is the world's second largest copper producer. Calls to Ramiro Peru, cfo, were not returned.

Nuveen Investments has moved to fill the vacant spots left by the departure of Jeffrey Maillet and his team of seven, prompting speculation from the market on what direction the firm's loan effort will take. Four managers from Symphony Asset Management, a company acquired by Nuveen earlier this year, will now manage the loan funds. The Symphony team to this point has been focused mainly on fixed-income, fueling speculation that Nuveen is not totally committed to the loan market. "Nuveen is looking to de-emphasize the funds, and rumblings are Maillet was looking for an organization that wants to commit to the loan area, while Nuveen has concerns over the credit quality of [loan] paper," said an industry analyst. Another loan salesperson laughed at the notion of Nuveen de-emphasizing the loan business.

Nomura Securities International, the global leader in yen bond underwriting, will shift its strategic mandate with the goal of making itself into a bulge bracket firm keenly focused on global fixed-income. Stefano Ghersi, the London-based head of international capital markets, says the firm has just begun to build up all of its regional groups and is broadening its product lines for debt capital markets to create a multi-currency origination and distribution platform. "This investment makes sense in the medium-term in terms of mandates and opportunities. Particularly from a debt point-of-view, there has never been a better time, because there is an increasing need for credit as a strategic resource," says Ghersi.

A $15 million auction of Quality Stores paper went off last Wednesday in the low 20s. Dealers report levels a month ago were in the 38 range. The rumored seller of the piece was Union Bank of California. Calls to Dan Brigham, bank spokesman, were not returned.

Managers of floating-rate funds are bracing themselves for retail investors to exit the loan market this quarter and beyond, as rising defaults and the record low LIBOR rate hit overall loan returns and those investors find loan funds may not be the sure bet they thought they were. Eric Jacobson, a Morningstar analyst, noted over the last year, many of the funds have already seen dramatic redemptions. "This is the worst period in the history [of loan funds], because the default problems coexist with the onset of mark-to-market pricing," he explained. With the development of mark-to-market pricing the true value of loans held is revealed, hitting the Net Asset Value figures and increasing volatility.

Young Broadcasting's bank debt got a nudge with the announcement of the company's tender offer on its bond deal. The bank debt traded up to 98, up from the high 97 range. The "B" paper traded in a $2.5 million swap. On Oct. 26, the company announced a tender offer. "They think the bonds have too high an interest rate and they're trying to buy them back," a dealer explained. He added that it makes the company and therefore the bank debt more appealing because it would mean Young Broadcasting would be less leveraged. Meanwhile, dealers note the broadcasting sector overall remains about flat. Emmis Communications' "B" paper was bid at 95 1/2 last week, which is about level. Calls to Vincent Young, the owner, were referred to spokesman James Morgan.

Sydney's APN News & Media has agreed to buy O'Reilly's Wilson & Horton newspaper business in New Zealand for A$1.2bn ($606m) in stock, bonds and assumed debt. APN is 40% owned by Independent News and Media. Independent and Wilson & Horton are both controlled by Irish billionaire Sir Tony O'Reilly, the deal is subject to shareholder approval, due in a meeting set for December 7.

Hong Kong Moody's has affirmed its Baa2 and P-3 long term and short term foreign currency ratings of Citic Ka Wah Bank after the announcement of its 100% acquisition of Hongkong Chinese Bank, but Standard & Poor's (S&P) has lowered the BBB outlook of its long term counterparty and certificate of deposit ratings to negative.

Dentsu management and lead banks Nomura, Merrill Lynch and UBS Warburg are to set the official price range for the advertising company's IPO today (Friday), when the company will also release its preliminary half year profits. Bankers close to the deal told EuroWeek that the response from investors has been encouraging and that the price will probably be set within the ¥380,000-¥400,000 range announced in preliminary filings with regulators in October.

Australia The restructured former Westpac Property Trust, Investa Property Group, on Monday raised A$85m through an institutional placement. Investa sold 45.2m units at A$1.88 each, a marginal discount to the last traded price of A$1.94. UBS Warburg and Deutsche Bank arranged the deal.