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Real estate mogul Marvin Davis'Davis Cos. has tapped Fleet Securities to provide a $170 million acquisition loan to fund the Los Angeles-based real estate company's acquisition of 181 West Madison Street, a prime office property in downtown Chicago. The trophy was purchased last month from Yasuda Trust for $234 million, or about $250 per square foot.

Lehman Brothers' $300 million, six-year term loan "B" for Tesoro Petroleum raced to $100 million in commitments within a day of launch on Sept. 5 as investors cited the attractiveness of the company and sector, as crack spreads continue to show healthy margins. The crack spread is the synthetic measure of margin for the oil refining industry that compares the difference between heating oil and crude oil, as well as between gasoline and crude oil. Historically, the sector has been less hot, said a banker, though throughout the year spreads have been good.

Top ranked high-yield paper and forest products analysts are divided over whether falling commodity prices will drive down the price of bonds and create an opportunity for investors to swap into lower-rated names for additional yield. Bill Hoffmann, an analyst at UBS Warburg and a second-teamer on Institutional Investor's 2001 All-America Fixed-Income Research Team, says weak commodity prices could eventually drive down high-priced credits such as Riverwood International senior subordinated notes (Caa1/CCC+) and Caraustar Industries (Ba1/BB-). This will create an opportunity for investors to swap out of higher-rated names, such as Tembec (Ba1/BB+), Norampac (Ba2/BB) and Smurfit-Stone Container (B2/B).

United Defense Industries secured an $800 million credit facility on Aug. 13 to replace its $200 million in high-yield subordinated debt. "We replaced our sub debt with all bank debt for a lower interest rate," said Francis "Buzz" Raborn, cfo. The company had prepaid a $707 million bank deal late last June. He says the new financing was oversubscribed to $850 million, but the company chose to cut back. "We didn't need the extra money," Raborn said. The Arlington, Va.-based company manufactures armored combat vehicles and naval systems. United Defense replaced the bond debt with bank debt because it's less expensive, more flexible, and the overall rates are lower, said Raborn.

Emerging market sovereigns are among the most frequent issuers in the Samurai market: Brazil has led the way and tops the Samurai issuer league table for 2001 to date. But in second place is Deutsche Telekom, demonstrating the new mix of issuers seeking to access the Samurai market. European corporates have begun to launch debut issues, following the success which US corporates such as IBM have had in raising funds from Japanese investors. Richard Morrow surveys the variety of deals brought to the market this year.

Amid the coverage of sluggish domestic issuance and prolonged economic gloom in Japan, there is one feelgood story in Tokyo: the continued strength of the Samurai bond market, which has regained the support of heavyweight offshore issuers. Apart from a stutter in confidence in the first quarter of this year, the demand from Japan's investors for the yield that Samurai bonds can offer is growing. Richard Morrow reports.

The Samurai bond market is not the only market that foreign companies have sought to take advantage of to raise yen financing. Many international corporates have looked to either Euroyen issues, which exclude US investor participation, or global yen bond issues as well. In total, public Euroyen issuance has reached about ¥3tr this year, well above the total for Samurai bond issuance.

Bulent Osman, head of the U.S. dollar interest-rate options desk at J.P. Morgan in New York, has been made redundant. An official familiar with the departure said Osman was let go as part of the firm's efforts to cut costs. Osman could not be reached for comment. Sara Strang, head of Bermudan options in New York, has been promoted to fill Osman's position. She confirmed her appointment and said the two positions have been merged, but declined to comment further.

National Australia Bank this week priced a A$110m securitisation of Australian industrial properties for AMP Industrial Trust, a property trust. The AMP group has set up a special purpose vehicle, Quay 62 Pty Ltd, which can be used to securitise assets from any of the property trusts that AMP controls.

Credit Suisse First Boston and SG, together with their South Korean partners Daewoo Securities and Hyundai Securities, this week began marketing the first securitisation for the Korea Deposit Insurance Corp (KDIC). The deal is smaller than was originally mandated, and will be wrapped by triple-A rated monoline insurer Ambac.

Australia National Australia Bank and US-based subsidiary HomeSide Lending were dealt a blow by Moody's this week, with the bank having the outlook on its Aa3 senior rating decreased to stable from positive and the subsidiary unit's long term A1 rating being dropped to A2.