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Analysts on the buy- and sell-sides say the carnage in European cable debt has created buying opportunities in German cable companies eKabel (B3/B-) and Callahan (B3/B-) (both are senior debt ratings). Frank Knowles, an analyst at Merrill Lynch in London, explains that a German government entity--which would later become Deutsche Telekom--owned a large national network of cable systems for the entire country in the 1970's, and has recently sold portions of its interest in several regions. As a result, eKable and Callahan have been able to buy into an already existing customer base, and to gain scale without formally acquiring other companies. Other factors, such as the density of the population and the fact these companies have more conservative capital structures, should lead to significant price improvement over the next couple of years, he says, once investors become comfortable with their business plans.

Up-front fees for institutional tranches inched down again to an average of 2.8 basis points per one million dollars committed last month, while pro rata tranches crept up from 3.8 basis points in July to 4.0 basis points in August for a rolling three-month period. According to Portfolio Management Data, fees on pro rata tranches for the three-month period ending August 2000 were an average 2.8 basis points on institutional tranches and 3.3 basis points on pro rata tranches for the same period.

Bryan Johanson, portfolio manager with C.S. McKee & Co., expects Treasury Inflation Protected Securities (TIPS) to move tighter by late October, when he predicts the Treasury to announce that it will stop issuing long term TIPS. Depending on the break-even inflation rate at that time, Johanson would consider selling his entire TIPS allocation, $104 million (8% of the portfolio), or reducing it to 5%, or $39 million. The inflation break-even is the difference in yields between nominal Treasuries and TIPS. If the break-even moves up to 1.80%, the firm will move to the 5% allocation. If the break-even goes above 2%, he will liquidate the entire holding to take profits. Right now, the break-even is at 1.56%.

Wilmington Trust Company has been shifting its corporate holdings into higher credit quality, more-liquid names in anticipation of the traditional performance lag in corporate bond in September and October, as well as slowing foreign investment in U.S. debt. Clayton Albright, manager of $600 million in taxable fixed-income for the Wilmington, Del. firm, says he has shifted about 4% of his portfolio, or $24 million, in the last month into mostly higher-rated corporate debt that he believes will weather a drop in corporate spread performance. Albright doesn't have an explanation for the lag.

As the number one player in its market position, Moody's Investor Services assigned Atlanta-based Gray Communication Systems' bank debt a Ba3 rating, expecting the company will suffer less than other television stations in the current economic downturn, said Christina Padgett, v.p. senior credit officer at Moody's. This is one of the factors leading to the assignment of a Ba3 rating to the $250 million senior secured credit facilities launched into the market two weeks ago by co-leads Bank of America and First Union, consisting of a $50 million revolver and $200 million term loan.

Jefferson-Pilot may consolidate two commercial paper backstop facilities into one $575 million credit and it will put the deal out to bid if it decides to make the move. The Greensboro, N.C.-based company will weigh the move next month because a $200 million, 364-day revolving credit facility through First Union expires in December, said Russ Simpson, v.p. and treasurer. He said Jefferson-Pilot needs to extend the facility, but has not yet determined the maturity due to the possibility of consolidating its backstops. The insurer also has a $375 million, five-year facility led by Bank of America set to mature next May. Simpson said the company will discuss with prospective banks whether it would be cheaper to combine both facilities or to maintain two separate credits.

The list of law firms filing class action lawsuits on behalf of investors against Metromedia Fiber Networks is growing as the optical IP Internet infrastructure provider attempts to put in place its long-awaited financing. Law firms Abbey Gardy, Schriffin & Barroway, Stull, Stull & Brody and Cauley, Geller, Bowman & Coates are among the 10 or so firms to date that filed lawsuits on behalf of investors last month, alleging that Metromedia officials issued a series of false statements starting on Jan. 8, when they announced Metromedia had obtained a commitment for a fully underwritten credit facility from Citicorp. Only on July 2 did Metromedia say the facility was subject to commitment from other lenders in the amount of $287.5 million.

About $10 million of Lucent Technologies' bank debt traded up to 95 last week, with dealers citing increasing confidence in the company's performance. "People are just more confident that they're going to do what they say," a trader noted. The Murray, N.J.-based company is one of the leading manufacturers of technology equipment. Frank D'Amelio, cfo, referred calls to Michelle Davidson, spokeswoman.

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.