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Morgan Stanley this week launched the seventh deal to be originated from its European Loan Conduit (ELOC) programme, this time with the help of Lehman Brothers, which also owned the collateral on the deal. Lead managed jointly by Lehman Brothers and Morgan Stanley, the deal is the first from the programme to bring on board a second lead manager. It refinances loans Morgan Stanley made to Lehman Brothers Real Estate division last year, which were used to buy Burford Holdings, formerly a UK listed property company.

The $100 million credit for Itasca, Ill.-based PrimeCo Personal Communications, led by Barclays and J.P.Morgan Chase, was filled last week, but only after pricing was jacked up 50 basis points to LIBOR plus 4 1/2%. Bankers familiar with the deal said original pricing of LIBOR plus 4% was considered tight and that progress was sluggish until the flex. Officials at Barclays declined to comment. The other banks that have signed up could not be ascertained. Officials at the company did not return calls.

Credit Suisse First Boston and J.P. Morgan Chase have been selected as joint lead arrangers for a loan backing Troy, Michigan-based Collins & Aikman Products Company's acquisition of Textron Automotive Company's trim division and refinancing of existing debt. A spokesman for Collins & Aikman said that approximately $1 billion of debt will be used to finance the $1.34 billion transaction, but he declined to comment on how the company will structure it between bonds and bank debt. CSFB, J.P. Morgan, Deutsche Bank and Merrill Lynch will be the banks involved, he said. The banks chosen for the financing advised on the transaction, the spokesman said. Calls to officials at the banks were not returned.

First Union is set to launch this Friday syndication of a $240 million credit for DRS Technologies, backing the company's acquisition of the Sensors and Electronic Systems business of The Boeing Company. Parsippany N.J.-based DRS, a defense electronics company, is buying SES for $84 million and is wiping out an existing $160 million loan with Mellon Bank arranged in 1998, noted Richard Schneider executive v.p., treasurer and cfo of DRS. Mellon will be on the new credit, Schneider noted, but he declined to say which other banks will be involved or why First Union was chosen to lead.

BNP Paribas and First Union's $400 million credit for Hyatt has received approximately $300 million in commitments, including $50 million pieces from First Union, BANK ONE and Firstar Bank. J.P. Morgan Chase, the documentation agent, has also committed $75 million, noted a banker. BNP Paribas is syndication agent and First Union is administration agent for the deal, split between a three-year, $300 million tranche and a 364-day, $100 million tranche. All-in drawn pricing is tied to a grid opening at LIBOR plus 70 basis points. Commitment fees for $35 million and $25 million pieces get 20 basis points and 17.5 basis points, respectively. Officials at First Union and BNP Paribas declined to comment. Calls to officials at Hyatt were not returned.

Credit Suisse First Boston is in the market with a $420 million refinancing for Addison, Texas-based beauty products seller Mary Kay on Wednesday. The debt consists of a $100 million, five-year revolver priced at LIBOR plus 3 1/4% with a commitment fee of 1/2%. There is also a $55 million, two-year asset sale term loan priced at LIBOR plus 3 3/4% and a $265 million six-year term loan "B" with an out-of-the-box spread of 3 3/4%. The new loan replaces a $515 million credit arranged in 1997, led by CSFB. Calls to officials at CSFB were not returned. Pricing on the old line could not be ascertained. David Holl, cfo, of the company that awards pink Cadillacs to sales consultants, was travelling and could also not be reached.

Washington Group's once-plummeting levels have turned around. Dealers reported a series of small trades this week in the 82-83 range, which is up from the mid-60s in late June. Meanwhile, dealers note increasing comfort surrounding the company's financial issues and confidence that its core business - construction - is in demand and profitable. The company is also expected to pull out of Chapter 11 bankruptcy protection by fall. Arch Wireless' debt is trading at 25, while Owens Illinois is trading at 90.

First Union is set to launch this Friday syndication of a $240 million credit for DRS Technologies, backing the company's acquisition of the Sensors and Electronic Systems business of The Boeing Company. Parsippany N.J.-based DRS, a defense electronics company, is buying SES for $84 million and is wiping out an existing $160 million loan with Mellon Bank arranged in 1998, noted Richard Schneider executive v.p., treasurer and cfo of DRS. Mellon will be on the new credit, Schneider noted, but he declined to say which other banks will be involved or why First Union was chosen to lead.

This week's Learning Curve covers pricing model application, namely calibration of market models to caps and swaptions, closed form solutions useful for calibration and pricing of Bermudan options with Monte Carlo in the context of the market models. Calibration To Caps & Swaptions

CDC Ixis Capital Markets, a subsidiary of CDC Ixis, plans to start offering foreign exchange derivatives for the first time within a year. The bank currently offers interest-rate and foreign exchange hybrid derivatives, but has not offered pure foreign exchange derivatives on a permanent basis before, according to Stéphane Kourganoff, global head of fixed income derivatives in Paris. He added the bank will only offer exotic derivatives because it has a specialty in structured products and does not have the global presence to hedge high-gamma options. Firms need a global presence to hedge this type of options because they require constant trading of the underlying risk.

Several of Dresdner Kleinwort Wasserstein's 20-strong Tokyo equity derivatives team are reportedly considering abandoning the firm after DrKW recently announced it will close its cash equity business in Japan and cut 1,500 jobs, mostly in Asia. "There's no good news built into this at all," said a market official in Hong Kong. However, rival banks are unlikely to be falling over themselves to cherry pick DrKW's Asian equity derivatives team because of tough market conditions and hiring freezes. A spokesman at DrKW said the bank remains committed to equity derivatives. He declined further comment