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Resolution Performance Products is continuing to aggressively pay down the debt on its term loans "A" and "B" with over $69 million repaid since the loan was signed on Nov. 14, 2000. Another voluntary payment of $7 million was made last week and now no mandatory debt repayments are required until September 2004, though when Resolution can it will continue to reduce the debt load, according to Travis Spoede, executive v.p., and cfo. "At the inception [the roadshow] there was a commitment to aggressively repay the debt," explained Spoede. "Interest is high priced and since there were no suitable acquisition opportunities, more value is created by reducing debt," he added. "What else can we do with the cash?" he asked. Pricing is at LIBOR plus 33/4 %, according to Capital DATA Loanware. Spoede declined comment on the interest savings.

The Royal Bank of Scotland is preparing to break into the French corporate bond market this year and hopes to lead manage its first public sterling-denominated and U.S. dollar-denominated private placement deals for French companies in the first half. Donald Bryden, Paris-based director general of RBS' French operations, says the firm will start to develop its euro-denominated business in the second half of this year. RBS is also in the process of hiring two senior bankers for relationship management and origination. Bryden says the new hires should be on board in the next six weeks or so. Currently, RBS has one origination banker working in Paris, Arnaud Nicoli.

Deerfield Capital Management, one of the top three issuers of CDO debt last year, is in the market with a new $325 million collateralized loan obligation--Rosemont CLO I-- and intends to shop for the remaining 40% of the deal's collateral in the first quarter. "We want to participate actively in the new issue calendar," said Jonathan Trotter, portfolio manager at Deerfield. The firm's latest fund is a cash-flow arbitrage structure that is already 60% invested in leveraged loans with 40% of leveraged loan assets still needing to be ramped. "We're looking for par and near-par names," he said, declining to name specific credits.

Deutsche Bank won a lead spot on a $1.7 billion financing package to back Coors' acquisition of beer brands from Interbrew because of the addition of a key banker to Deutsche Banks' team. J.P. Morgan and Morgan Stanley also won spots based on relationships. Tim Wolf, senior v.p. and cfo of Coors, said David Jacobs' jump from Morgan Stanley to Deutsche Bank in June sealed the deal for the German bank. "There was no prior relationship with Deutsche Bank, but Coors thought highly of them, and when David Jacobs moved over from Morgan Stanley," Deutsche Bank got the nod, Wolf said. Jacobs, a managing director and head of global consumer investment banking, had been head of the European food and beverages practice at Morgan Stanley.

The March 31 fiscal year end for Japanese banks was said to be the driving force behind a $10 million auction for Crown Cork & Seal's bank debt held last Thursday. "The Japanese banks are just looking to purge [underperforming credits] right now," a banker noted. On Thursday the debt traded slightly higher than 85, a surprise to some since it had been offered in the 84 range. "There's strong bids in the distressed market right now," a dealer said. "At the end of the year, most want to sell, which pushes prices down. People then want to buy back at the beginning of the year." The same seller also reportedly held a $37 million auction for Pacific Gas & Electric paper, trading it at 96 1/2.

Investment banks without ties to commercial banks held their own against those firms that usually benefit from the commercial banking relationships of their parent companies. In what was a record year for investment-grade bond underwriting business, David Hendler, an analyst at independent fixed-income research firmCreditsights, argues that the dealer subsidiaries of large commercial banks, in particular Banc of America Securities, should not be so quick to claim victory in their battle to win underwriting business.

Extended Stay of America amended its $900 million credit facility last month to temporarily allow for higher leverage. Gregory Moxley, cfo, explained that the company wants to be positioned for growth projects in 2002 in anticipation of a stronger economy in 2003. "By temporarily raising the total leverage, it will give us the ability to accelerate our development," he said. According to the covenant amendments, the allowable maximum leverage multiple has been increased from 4.75x to 5.25x EBITDA. In the second quarter of 2003, leverage will go back to its original limit. The Spartanburg, S.C.-based company offers extended stay lodging services.

American Tower's bank debt last week climbed into the 95-96 range, up from 94 in late December. The uptick brings the debt closer to where it was in early December before it slipped from 96 1/2. A dealer reported the paper was offered in the 98 range last Wednesday, but there were no bids. Traders explained that paper can be offered as high as the seller wants, but what drives pricing are the bids. Dealers are awaiting first quarter numbers to make any calls on the company, but some are wary of its aggressive buildout as other telecom names stumble. But some players remain optimistic. "People worry about [the buildout], but they've got plenty of cash on hand," said a dealer. "As cell phone use increases, there's going to be more tower use. So they're in good shape."

Credit Suisse First Boston this week is launching syndication of a $300 million bank deal for Laboratory Corp. of America Holdings and a handful of banks have already taken lead roles. Wachovia Securities, UBS Warburg, Bank of America and Deutsche Bank are syndication agents for the BBB rated senior unsecured credit. Split between a $100 million, 364-day revolver and a $200 million, three-year revolver, the spread is LIBOR plus 1%. There are 12.5 basis points and 17.5 basis points available as facility fees for the respective revolvers, said a banker.

Bank of America is set to syndicate a $75 million credit facility for Atlanta-based The Profit Recovery Group. The loan will be used to fund the merger and integration costs emanating from the planned acquisition of Howard Schultz & Associates, said Leslie Kratcoski, director of investor relations for Profit Recovery. Bank of America supplied the previous credit line, she said. The old facility has now been cancelled, she added with a charge of $2.6 million. The company provides recovery audit services. Kratcoski could not comment on the pricing or timeframe for completion at press time.

Bear Stearns has eliminated six fixed-income analysts from its London-based European research team, saysJohn Knight, a firm spokesman, declining further comment. Three of the layoffs were made in high-grade research while the rest were made in high-yield. Among the analysts let go was Graham Neilson, fixed-income strategist. His responsibilities have been assumed by Alexander Popov, a junior analyst. Philip Crate, head of European fixed-income research, was on holiday and could not be reached for comment.

Brown Shoe Company closed a $350 million secured revolving credit facility in late December, replacing more expensive bond debt and getting increased liquidity. Andy Rosen, cfo, explained that the company retired a bond deal with a coupon of 91/2 %. The new debt has a floating rate and starts at LIBOR plus 2% to 21/2 % based on a grid. The St. Louis-based company sells footwear worldwide. It markets brands like Naturalizer, LifeStride and Buster Brown.