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AMR Investment Services will rotate 10% of its portfolio, or $14 million, from agencies into corporate bonds should the Federal Reserve bring the Fed fund rates from its current 2.5% level to 2%. Bonnie Mitra, senior portfolio manager, says he considers 2% the bottom of the Fed easing cycle and the first trigger for a pending corporate bond rally.

Texas Pacific Group found out the hard way that the difference between making a discreet inquiry about a big deal and informing the media of its intentions may come down to a single number--a fax number. Reuters reported that Texas Pacific Group apparently thought it had sent a fax to UBS chairman Marcel Ospel expressing interest in a new Swiss airline based on regional carrier Crossair, but sources close to the deal said the fax from Texas Pacific's ceo David Bonderman intended for Ospel was instead sent--by accident-- to Swiss weekly business journal HandelsZeitung instead. Loan Market Week's fax number may or may not be (212) 224-3956.

The Deal Roll-off Chart, provided by Capital DATA Loanware, lists the 50 largest leveraged credit facilities in the U.S. market that are due to mature in the coming month. It is designed to provide a look at potentially available money in the market as credits are renewed or retired.

Winston-Salem, N.C.-based Wachovia Asset Management is considering shifting 2-3%, or some $140-210 million, of its fixed-income assets into 10-year auto paper. Wayne Morgan, portfolio manager of approximately $7 billion in taxable fixed-income, says the firm would probably swap out of shorter-maturity ABS or telecom bonds in an attempt to pick up spread and capitalize on a steep yield curve. He says he has been taking a preliminary look at General Motors Acceptance Corporation 6.875% notes of '11 (A2/A). The bonds had widened to 237 basis points over Treasuries last Monday, 40-45 basis points wider than they were on Sept.11. Morgan says Wachovia may buy the bonds at those levels, but he wants to re-read the credit reports before taking the plunge. Any widening in the bonds, in spite of the implications it would have for further softening in the economy, would only make them more attractive, from Morgan's point of view.

London-based Gartmore Investment Management, which runs a $59 million European bond fund, may add tobacco credits such as Imperial Tobacco and Gallagher to its portfolio as a defensive move and to bring more diversification. Richard Hodges, portfolio manager, says Imperial Tobacco and Gallager, unlike British American Tobacco, have limited exposure to the U.S., are well-positioned to weather a further downturn in the global economy and have underperformed significantly year-to-date. The firm is trying to determine at what point these credits offer value, but doesn't have spread levels in mind at the moment. Since the terrorist attacks on Sept. 11, the firm has been reducing its credit exposure and is concentrating on consumer non-cyclicals, utilities, and high-quality subordinated debt in the three- to five-year portion of the curve, from financials such as Barclays Bank and Italy's IMI Sao Paulo.

F&C Management's $1.8 billion euro-sovereign bond portfolio is overweight Greek government bonds, on the view that the credit offers value and yield. Lionel Oster, portfolio manager in London, says Greece's macroeconomic fundamentals continue to improve, and the upcoming Olympics in 2004 should spur domestic demand. He is also optimistic that Greece will continue to reduce its debt, which now stands at 98% of GDP, to 95% by year-end. The Greek government is enjoying stability and is in a good position to maintain its expenses at a reasonable level, he added. Greece's 10-year bond traded at 47 basis points over German bunds last week, and Oster predicts that will tighten to around 35 over the next 12 months. If Greece performs as expected, the fund will take profits and revert to the core European markets Germany and France.

Credit Suisse First Boston is set to launch this week its long-awaited deal for Akron, Ohio-based Roadway Express, backing the acquisition of Arnold Industries. The $325 million credit comprises a five-year, $150 million revolver and a five-year $175 million term loan, with a spread of LIBOR plus 21/ 2%, based on a grid. There is a 40 basis points commitment fee on the revolver. CSFB syndication officials did not return calls.

The Deutsche Boerse will add sub-indices for sterling-denominated, non-gilt government bonds, state-guaranteed bonds, collateralized bonds and corporate bonds to its sterling-denominated iBoxx index family by year-end, says Andreas Brunner, a member of the Deutsche Boerse's index team in Frankfurt. Sterling-denominated government indices debuted earlier in the year.

Dresser's credit has stayed afloat in a market with sinking levels, with about $5 million of the paper changing hands last week around 100. "It's got good diversity and a good coupon," said a dealer, explaining why the paper has held up despite other steady names, such as Nextel Communications and Charter Communications, losing footing. Nextel has dropped from the low 90s to the mid-80s and Charter has softened to the mid-90s from the high 99 range. Buyers and sellers active in Dresser could not be ascertained.

Federal-Mogul's bank debt softened to a bid-offer spread of 50-52 last week, coming back about a point after a high two weeks ago of 52 1/2-53. No trades were reported, and dealers who chatted optimistically two weeks ago about the bankruptcy protection were more cautious last week, saying the restructuring may be more drawn out than originally thought. "The market just stinks right now, and people are concerned that it could take longer for the company to get out of Chapter 11," a dealer said. "Their core business is hurting at the same time [asbestos] liabilities are hurting them." Another market player, trying to explain the work ahead for Federal-Mogul, put it another way. "It's like [Austin Powers nemesis] Fat Bastard trying to run uphill against Jesse Owens," he said. The Southfield, Mich.-based company manufactures car parts. Calls to G. Michael Lynch, cfo, were referred to spokesman Jim Fisher who declined to comment.

Investor concerns over the plummeting all-in borrowing rate has prompted Lehman Brothers to create a LIBOR floor on its $450 million term loan for Tesoro Petroleum. The move, believed to be the first of its kind, is seen as one potential solution to investor fears over current returns and could be implemented on other credits as long as rates stay as low as they are, said investors and bankers. Repeated calls to Lehman Brothers' syndication officials were not returned. David Chacon, director of investor relations for Tesoro, declined to comment on the rate floor.