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Moody's Investors Service downgraded the debt rating of Finlay Enterprises to Ba3 from Ba2 resulting from lowered expectations for department stores sales and particularly for discretionary purchases such as fashion and gift jewelry, in the aftermath of the Sept. 11 attack. Approximately $500 million of debt securities are affected. Finlay Enterprises, headquartered in New York City, is the largest operator of leased jewelry departments in the U.S. Calls to Bruce Zurlnick, cfo, were not returned. A spokesman declined to comment. A stable outlook is expected, however, supported by the strength of Finlay's host relationships, and the flexibility inherent in its cost structure.

The par market lost footing last week, with overall levels dropping 1/2 to one point. Dealers were left sifting through the names and distinguishing which credits had dropped on fundamental issues and which were just weighed down on heavy unloading of the paper. Cable and telecommunications names that had traded at strong levels before the Sept. 11 attacks are expected to find their way back up, but hotel credits are said to be dropping on concerns about their performance.

Pacific Gas & Electric's bank debt moved up to the 86-87 context, trading up from the 82 1/2 range. An estimated $50 million traded over the week. Dealers said the uptick in levels is a result of energy prices going down. "The problem was there was a one-time spike in natural gas prices with a regulated end-user price," explained a dealer. With the state now managing the purchasing of energy, it's allowed a raise in end-user rates, meaning the costs have gone up to the consumer. Pacific Gas & Electric is a utility company based in San Francisco.

The following list of changes represents rating changes from Sept. 11 to last Thursday night.

The calendar was dominated by BBB utility and energy companies for the week. The deals have the same three characteristics. 1. They are predominately in stable, low-beta names to the overall market. Given the still uncertain political and economic atmosphere, deals that should hold up relatively well in a higher volatility environment are at a premium. Utilities are generally more stable than more cyclical sectors as they collect monthly cash revenues from their ratepayers. Energy companies, although hurt by the decline in oil prices, are also generally seen as more defensive plays. 2. The deals have been priced to which likely reflects both the recognition of syndicate desks that it is currently a buyer's market and also the fact that at these low absolute funding yields, issuers are much less sensitive to spread levels. (Conoco, for example, was able to issue 10-year debt at an all-in cost of just 6.35%.) 3. There is still cash to be put to work. The technical story is still very much intact with record inflows into taxable fixed income funds in August and continued positive funds flows in September as investors allocated out of equities into debt.

Dealers are watching the bank debt for Winn Dixie, noting that its stock price nearly halved last week from $20 to $11. The company's "B" paper traded in the 99 1/4 to 99 3/4 range early last week, a drop from levels around 100. Dealers said that Winn Dixie is not one of the most active names in the market, but there may be increased interest as investors move toward food credits for their stability. Richard McCook, cfo, did not return calls for comment. Micky Claire, head of public relations, also did not return calls.

Xerox's bank debt got an additional boost last Tuesday on news that the company had secured an agreement with manufacturing services company Flextronics. The debt notched up to 85 1/2 - 86 1/2 from the 85 range. An estimated $10-$20 million changed hands. Xerox is based in Stamford, Conn. Calls to Barry Romeril, cfo, were referred to spokeswoman Christa Carone. "Outsourcing the deal gives us some more flexibility," she said. Last week Romeril announced his retirement from Xerox.

Allied Waste's "A" tranche notched down to 96 5/8 last week from a level in early September of 99 7/8 and market players attributed the slump to a general economic slowdown. A dealer said Allied's bank debt has been in the 95-96 range throughout the early part of the week. The credit has been one of the strongest in the market, due to the defensive-nature of the trash hauling business, but dealers say the market downturn could be hitting even stable names. "The [terrorist] attacks shouldn't affect their business. Maybe there are transportation hassles the company may be experiencing carting trash away," a dealer speculated. The company is based in Scottsdale, Ariz. Thomas Ryan, cfo, referred questions to Mike Burnett, who did not return calls.

Moody's Investors Service's Ba3 rating for Advance Stores proposed credit facility, currently in syndication through lead banks J.P Morgan, Credit Suisse First Boston and Lehman Brothers has remained unchanged following the events of Sept. 11. Marie Menendez, v.p., senior credit officer, corporate finance group for Moody's, said, the B1 senior implied rating of Advance Holding means it is more volatile than higher-quality credits, but Moody's does not expect the credit quality of the loan to change. The new facility consists of $530 million in senior secured term loans and a $150 million revolver.

UBS Warburg and Bank of America next week will launch general syndication of their $3 billion term loan backing Devon Energy's acquisition of Anderson Exploration. General syndication is ready to roll now that $3 billion of bonds--the other part of the financing package--were sold at the end of September. A UBS banker said originally the top-tier banks were allocated $600 million pieces, and now each bank will syndicate $300 million as the bonds take out the first two to three years of bank debt. The bank meeting will be Oct.18, he said, though fees have not yet been set. The $3 billion of bonds was split into $1.75 billion of 10-year notes priced at 67/ 8% and $1.25 billion of 30-year notes priced at 77/ 8%.

Beazer Homes moved in to renew a $250 million credit a year before it was set to expire because the company did not want to wait on the market, said David Weiss, cfo. "We didn't want to leave any uncertainty. The market may be difficult by then," he said. As it was, pricing on the Atlanta-based construction company's three-year deal went up 30 basis points, to 13/ 4% over LIBOR.

BNP Paribas is looking for commitments in exchange for tier one titles and early-bird upfront fees ahead of an Oct. 22 bank meeting that will be held in Los Angeles for a $150 million revolver for Smart & Final. A company official said BNP Paribas was chosen to lead the deal after the food company talked to several banks. "Smart & Final was impressed with the team though pricing is always an issue as well," he said. There was a wide range of scenarios quoted by the banks interviewed, probably because of the uncertainty of the market, said the source. One was 1/4% lower, others were 1/2% or 3/4% higher.