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Brentwood, N.Y.-based Allou Health & Beauty Care, a distributor of health and beauty-aid products, is looking to issue $150-200 million in high-yield bonds in the near future to improve liquidity, according to BW sister publication Loan Market Week. David Shamilzadeh, president and cfo, declined comment on the purposes of the debt. The company has recently switched lead banks from Fleet Capital to Citibank and Congress Financial after a competitive bid offered a better interest spread. Congress is a unit of First Union National Bank. Shamilzadeh says the old $180 million asset-based revolver carried a rate of 3 1/2% over LIBOR while the new loan carries a rate of 2 1/2% over LIBOR. "The pricing speaks for itself," he said.

Schuler Homes has expanded its revolving credit facility from $225 million to $350 million in order to bring more banks into the syndicate and generate greater liquidity. "The existing $225 million facility that closed in June had four banks," said Thomas Connelly, senior v.p. and cfo. "We felt like bringing in additional exposure to more lenders." Bank of America and FleetBoston Financial led the $225 million credit, with First Hawaiian Bank the administration agent and California Bank & Trust a participant. Eight additional lenders came in on the expanded credit including BANK ONE, Key Bank and Comerica Bank.

Buysiders are cautiously eyeing the $500 million term loan "B" for Adelphia Communications as existing paper trades down in the secondary market. A banker familiar with the deal, which is lead by Bank of Nova Scotia and First Union, a division of Wachovia, said that the $2 billion pro rata portion is going smoothly as the company cajoles relationship lenders into the deal. But with existing paper trading in the secondary market below the price offered for the new "B" in syndication, investors are waiting on the sidelines. The banker added, not only is the paper trading down, but there is also lots of it. Pricing on the $1.5 billion revolver and $500 million term loan "A" is 2% over LIBOR, while the "B" carries a LIBOR plus 3% spread. The "B" also carries a 1/8% upfront fee, so in effect, it is offered at 997/ 8%, explained a banker.

Aladdin Gaming's bank debt has been steadily trading up over the last few months and reportedly hit 88 1/2 in a trade early last week. Merrill Lynch was rumored to be the seller, but the amount could not be determined. Buyers were offering 77 for Aladdin's bank debt in early June, and by July, levels had moved up to the low 80s. There were no trades reported last week. Tom Lettero, cfo, did not return calls for comment. Calls to Ben Holden, spokesman, were also not returned.

Brentwood, N.Y.-based Allou Health & Beauty Care, a distributor of health and beauty-aid products, switched lead banks from Fleet Capital to Citibank and Congress Financial after a competitive bid offered a better interest spread. Congress is a unit of First Union National Bank. David Shamilzadeh, president and cfo of Allou, said the old $180 million asset-based revolver carried a rate of 31/ 2% over LIBOR while the new loan carries a rate of 21/ 2% over LIBOR. "The pricing speaks for itself," he said.

American Airlines is bringing a $2 billion enhanced equipment trust certificate transaction to market today, considered the largest EETC to date, according to BW sister publication Corporate Financing Week. Merrill Lynch and Morgan Stanley will be co-joint bookrunners. The issue will be sold under rule 144A to qualified institutional investors. The second largest EETC was issued by United Airlines and came in slightly over $1.5 billion in December 2000.

Salomon Smith Barney,Bank of America,J.P. Morgan and First Union co-led and launched two separate deals last week for FPL Group Capital and its subsidiary Florida Power & Light. The Salomon and B of A deal for FPL Group Capital is $2 billion. J.P. Morgan and First Union's deal for the subsidiary is $1 billion, according to a market source. Each is divided into 364-day and three-year pieces, she said. Pricing on the $2 billion loan is LIBOR plus 25 basis points with a step-up by 10 basis points each time if 33% and 66% of the loan is drawn, she explained. Commitment fees are 8 to 12.5 basis points and the facility fees are 8 basis points on the 364-day and 10 basis points on the three-year lines.

Eric Green, a portfolio manager at Penn Capital Management, has recently been adding to his position in Pegasus Communications on the view that Pegasus is an excellent yield play and a likely takeover candidate. Green has been buying the zero coupon notes of '07 (Caa1/CCC+) because they offer considerably more yield than comparable cash pay paper, and he believes the principal will be paid off when the bonds mature. Last week, the zeros traded at 58, giving it a current yield of 18.14%, while 9.625% senior notes of '05 (B3/CCC+) traded at 92, giving them a yield-to-worst of 12.14%.

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).