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J.P. Morgan, Credit Suisse First Boston, Deutsche Bank and Merrill Lynch are bringing back a reworked bank and bond deal for Collins & Aikman, backing the acquisition of Textron's auto-trim business for sponsor Heartland Industrial Partners. The expectation is that the bond market will be more receptive than in September when the original deal was to be launched. The acquisition, announced in August, was put on the backburner following Sept. 11 and the collapse of the high-yield debt market, explained John Peisner, senior v.p., investor relations for Collins & Aikman. A reworked deal with improved debt to EBIDTA ratios, a reduced price and more stock as currency, is the other major factor that should ensure completion of the financing by year-end, he noted.

Citibank's and Merrill Lynch's planned recapitalization for Paragon Trade Brands has been scuppered after Tyco International agreed to buy the diaper manufacturer for about $565 million in cash plus the assumption of $85 million in debt. A $425 million recapitalization for Wellspring Capital Management was coming to market, said a banker familiar with the proposed loan. But Tyco has stepped in and is unlikely to need any kind of financing, as it is such an immensely capitalized company.

Following a hefty initial public offering and some stellar gains this year, Weight Watchers International is refinancing its bank debt via administration agent Bank of Nova Scotia and lead arranger Credit Suisse First Boston. The company, described in a September 10-Q as significantly leveraged, has improved its profile since a successful IPO in November and is looking to trim its borrowing spread, said a banker familiar with the deal. The company's $418 million IPO tipped the scales as the largest IPO of the month.

Owens-Illinois' bank debt traded up to the 98 ¼-99 range from 97 this week on the lingering rumor of a bond deal. Volume on trades could not be ascertained by press time, but dealers indicate it's small. The debt has moved up from 93 over the month as Owens Illinois was rumored to be among the companies issuing notes to pay down bank debt. There has been no official company announcement, but the debt continues to get boosted on the rumor. "People are willing to trade on that alone," said a dealer. The Toledo, Ohio-based company is a glass manufacturer. Calls to R. Scott Trumbull, cfo, and the investor relations department were not returned by press time.

Charter Communications' debt traded this week at 98 ¼ in a $2.5 billion trade. Dealers cite the company's financial standing and a lack of new issue as the prime reasons for the interest. Matched against the debt of competitors such as Global Crossing and McLeod, which are both trading in distressed range, Charter looks solid, dealers said. Moreover, "There's no new issue and people are dying for paper," said a trader. Another credit pumping up on the low new issue is Adelphia Communications, which traded up to 98 7/8 from 98 ½ last week. Calls to Kent Kalkwarf, cfo at Charter, were referred to Mary Jo Moehle, director of investor relations, who declined to comment.

Credit Agricole Indosuez has added two members to its new loan team taking shape under Paul Travers, managing director. Charles Kobayashi and Charles Henneman signed on last week to help build up and expand a new investment management presence at the bank after the departure of Dan Smith and some other key loan players to Royal Bank of Canada two months ago.

Dealers reported a small trade of Enron Corporation's bank debt at 25 last Tuesday in a series of small trades following the company's Chapter 11 filing and debtor-in-possession financing. The debt dropped to 20 1/2 on Monday after the company filed for bankruptcy over the weekend, it bounced back to 25 after Citibank and J.P. Morgan offered $1.5 billion in DIP financing. Dealers say the bankruptcy filing can improve optimism on a company. "It puts a timetable on things," as one explained. Deutsche Bank and UBS Warburg are among the desks rumored to be active in the credit, although officials at both firms could not be reached for comment. Calls to Sharonda Stevens, company spokeswoman, were not returned.

An announcement on Monday that Enron Corporation had filed for Chapter 11 pushed trading levels up to 25 from around 20. Roughly $50 million has changed hands over the week. Dealers say the filing has put more certainty on a timetable for the company's financial issues to be sorted out. Citibank and J.P. Morgan have also offered $1.5 billion in DIP financing. Mariner Post Acute Network's debt traded on Tuesday in an auction at 69-70, which is up slightly.

Market sources said the last step in making a manager switch final on Indosuez Capital Funding IV from Credit Agricole Indosuez to Royal Bank of Canada will require approval from the ratings agency. "Rating agenices have stopped changes before but on this deal there's no reason it shouldn't go through," said one source close to the deal, referencing the fact that the management team at RBC was the former management team on the old deal. The management team at RBC, led by Dan Smith, formerly of Indoseuz, will be meeting with rating agency personnel from Fitch Inc., Standard & Poor's, and Moody's Investors Service at the end of the week. Officials at the rating agencies declined to comment. Smith did not return calls by press time.

Prudential Investments Japan, with a fixed-income portfolio of JPY100 billion (USD806 million), plans to launch a fixed-income fund in Japan that will purchase credit-linked notes and synthetic and cash collateralized debt obligations if there is enough demand. "We'll be conducting a feasibility study," said Mayuka Tomizuka, in the investment management department in Tokyo, noting that the decision will come down to the level of demand among its Japanese institutional clients. If the demand is deemed to be there the fund could launch in the latter part of next year. The fund manager has not established a target size or return for the fund, according to Tomizuka.

ABN AMRO Asset Management is looking into purchasing and selling credit derivatives next year to tailor its exposure to specific credits for its EUR850 million (USD749 million) European corporate bond fund. An official in Amsterdam said the fund, which holds about 150 investment-grade credits, has been in discussions with Merrill Lynch to determine whether it makes sense to use single-name default swaps. ABN uses a Merrill index for the fund, which is why it is talking to the dealer and not its in-house bank. However, it would be open to talking to other potential counterparties as well, according to the official. The asset management company would use default swaps to gain or reduce exposure to specific credits at specific maturities, which is currently difficult in what he called the relatively sparse European cash bond market.

Enron's contribution to the credit derivatives market--bankruptcy swaps--likely will die off if the power company files for bankruptcy, according to London-based credit derivatives traders. "Bankruptcy swaps was something it set up and something it wanted to make big, but it never really took off," noted a trader in London. "Bankruptcy swaps was something they set up and look where they are now," he added. Enron's European operations were placed into administration Thursday and Alex Parsons, spokesman in London, declined comment.