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Las Vegas-based Mandalay Resort Group's new $1.25 billion credit facility brought several new players to the casino operator's table as the banks gamble on providing commercial loans to win investment banking business. Glenn Schaeffer, president and cfo of Mandalay, said new banks came in on the refinanced credit that was oversubscribed by 30% and closed last week. He could not comment on potential investment banking business Mandalay has to offer.

Moody's Investors Service upgraded the rating on Beazer Homes USA's $250 million unsecured revolving credit facility to Ba2 from Ba3 because of strong revenue and earnings growth. During the three-year period from 1997 to 2000, Beazer's revenues grew by 79% to $1.53 billion, EBITDA increased by 200% to $106 million and net income rose by 290% to $43.6 billion.

A $5 million piece of Allied Waste traded up slightly to 99 7/8. The credit has maintained momentum even as the industry slows. Dealers say there's been no news on the company lately, but that Allied Waste remains one of the safest bets in the market. "When certain credits trade, it just indicates new buyers are coming in or people are managing their exposure," he said, adding, "It's not a super-complicated thing: People have always got to get rid of waste." The trash hauler is based in Scottsdale, Ariz. Calls to Thomas Ryan, cfo, were referred to Mike Burnett, director of investor relations, who did return them by press time.

Levels for asbestos credits inched up last week, with Armstrong Holding's debt bid at 55.8 and Owens-Corning's levels at 70 bid, from as low as 50 three months ago. No trades were reported. Dealers continue to cite an improving asbestos market. Despite Bank of America's dumping of asbestos names three weeks ago, dealers say levels haven't suffered among other holders of the name. Armstrong Holdings, based in Lancaster, Pa., manufactures hardwood flooring. Owens-Corning, based in Toledo, Ohio, makes fiberglass and composite materials.

Cable names are continuing to soften with Adelphia Communications flooding the secondary market with $3 billion in new issue. Charter Communications' bank debt notched down to 98 7/8, then offers popped back up to 99 1/8. Credits in the sector have remained liquid, as market players cite steady business, but all the activity may be coming back to haunt some of these names. "It's about demand," explained a dealer. "Cable names have traded around so much, everyone's holding a piece." Charter, a cable systems operator, is based in St. Louis, Mo. Calls to Kent Kalkwarf, cfo, were referred to the investor relations department and not returned by press time.

Deutsche Telekom was scheduled to pay off $2.65 billion of VoiceStream Wireless' senior credit facility debt last week at par. "It hasn't happened as of yet," Casey Otley, assistant treasurer of VoiceStream, said last week as LMW went to press. "From VoiceStream's perspective, it's replacing our debt with an inter-company rate. From DT's perspective, it's retiring more expensive debt." Deutsche Telekom finalized the acquisition on May 31.

Dresdner Kleinwort Wasserstein is structuring a $1 billion synthetic collateralized loan obligations based on a reference portfolio of high-yield loans. According to Derivatives Week, an LMW sister publication, the CLO is due to hit the market early next month. Ebo Coleman, v.p. senior analyst in the structured finance group at Moody's Investors Service in London, said the agency has not rated any high-yield synthetic CDOs in Europe but is looking at several transactions and expects at least two to come to market before year-end. Officials at DrKW declined comment.

There is nothing to write about this week of note. The only deals were a two-tranche BBB offering from DPL on Friday (August 23), a $3 billion AAA 5Y for the European Investment Bank and a AA 7Y $750 million from the Province of British Columbia. That said, the market might soon be longing for more quiet days. Estimates of the forward calendar for investment grade corporates for the month of September are anywhere from $40-70 billion, with the wildcard the amount of commercial paper that Ford and GM look to term out ahead of possible downgrades in October.

Centennial Communications' $50 million term loan "C" add on, offered at 95 in syndication, may have pleased new entrants to the credit, but the discount to its 97 trading level presents a problem for investors. A banker familiar with the deal said that offering an add-on credit at a discount results in existing debt being marked down in portfolios. "Centennial is trading at 97, and logically if you can buy Centennial debt at 95 elsewhere and it is a similar security with a similar spread, you have to mark your own loans at 95. If a bank is holding a $5 million piece, then this is a $100,000 hit," the banker explained, adding nothing of this magnitude has occurred before with an add-on.

As defaults and bankruptcy filings continue to mount, the leveraged finance market is seeing not only a rise in debtor-in-possession loans, but also more non-traditional players such as insurance companies and collateralized loan vehicles investing in DIPs. Michele Kovatchis, senior v.p., corporate finance at Heller Financial, said that more CLOs, banks and insurance companies, such as Prudential and MassMutual, are participating, as they become increasingly comfortable and familiar with the DIP concept. Grace Healy, spokeswoman for Prudential's Capital Group, and officials MassMutual could not provide comment by press time.

Nextel Communications' bank debt notched up in a series of trades amounting to $15 million last week. Debt hit 93 3/4 then softened to 92 3/4 last week on news that the company would buy back some of its bonds and swap it for equity. The company announced early last week that it would cut about $857 million consolidated debt by repurchasing senior notes of its Nextel International unit. Citing a slow overall market, dealers said there was little fanfare over the uptick in levels. "It traded up a point or so. There's not that much activity in it," said a dealer. Calls to Mike Brittain, cfo, were referred to Joe Wilkinson, v.p. investor relations. He declined to comment on bank debt trading.

Premcor restructured its deal to address a tough pro rata market, and in turn upsized the original amount. The loan breaks down into two term loans, divided between $150 million and $500 million tranches. Jeff Beyersdorfer, v.p. finance and treasurer, explained the deal is structured differently than the existing credit to address a weak pro rata market and to ensure the credit would be fully subscribed. "We wanted to attract different investors," he said. "We were looking at the institutional market and targeted them for the $150 million [portion of the credit] because of the decline in the size of the pro rata market."