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Moody's Investors Service predicts the high-yield default rate will reach 9.5% by the end of the year, a nearly 67% increase over last year, and Standard & Poor's sees a default rate of over 8% by the end of this year. Furthermore, Moody's says defaults will continue rising into 2002 on the way to peaking in March at 10.1%. David Hamilton, a Moody's risk management analyst, says several factors contribute to the agency's forecast. He says Moody's anticipates the summer will be quiet for speculative grade defaults, but will be followed by a surge in defaults toward the end of the year--a pattern similar to last year when most defaults occurred at year-end. In 2000, the default rate hit 5.7%. Moody's had predicted it would come in at 6%. Diane Vazza, high-yield analyst at S&P, said "We're starting to get some positive economic figures that support the argument for a peak by the end of this year." As of the end of the first quarter, defaults were running at just over 6%, Vazza said.

Levels onNextel Communications' bank debt strengthened last week with the bank debt following the bonds' incremental climb to 80. The levels on the bank debt were reported at 92 1/2 to 93 1/4 early last week, which is up from trading levels of 90 three weeks ago. Nextel, one of the most liquid and strong names, had recently sagged a little as the telecom industry has plunged.

A $10 million piece of Owens-Corning's bank debt traded at 62 1/2 last week, reportedly in an auction, but traders could not confirm that one took place. The company's levels have jumped around over the last couple months, spiking from 61 to 65, then settling in the 62 range. Owens-Corning, based in Toledo, Ohio, is one of the world's largest fiberglass manufacturers.

About $30 million of Pacific Gas & Electric's bank debt traded last week at 69-70, which is about level to previous trades. Buyers and sellers could not be determined by press time. A dealer noted that as California gets a better grasp of the energy crisis, levels on PG&E's credit should start to move up. "They're starting to price and place where they should trade. Things should improve," he said. PG&E, based in San Francisco, Calif., is one of the largest utility holders, serving gas and electric customers in central and northern California. Calls to Peter Darbee, cfo, were not returned by press time.

Rockford Corporation closed a $30 million credit facility with co-leads Bank of America and Bank One to provide financing for future acquisitions. Its existing deal with Finova Group expired earlier this month. James Thomson, cfo, explained that the new deal is structured differently than the previous one to accommodate the company's growth strategy. "We were trying to create a financial structure which includes acquisitions," he said. "We have a working line of credit and an acquisitions line." The old deal was an asset-based loan.

Substantial free cash flow generation and strong demographic trends supporting growth helped earn Univision Communications' $1.5 billion five-year credit a Baa3 rating from Moody's Investors Service. The rating is also supported by Univision's dominant position in U.S. Spanish language television broadcasting and a valuable station group, noted Glenn Eckert, v.p. senior analyst at Moody's. The company's $500 million in senior unsecured notes also received a Baa3 rating. The debt will be used to finance the acquisition of stations from USA Broadcasting, Raycom Media and Equity Broadcasting Corporation. Administrative agent J.P. Morgan Chase and documentation agent BNP Paribas launched syndication on June 22. Pricing is at LIBOR plus 11/4%.

Skandia Insurance Co. is in the market via its special funding vehicle Skandia Capital Aktiebolag (Publ) with a $350 million, five-year Deutsche Bank-led facility to refinance existing debt. A source familiar with the situation told Insurance Finance & Investment, an LMW sister publication, that the Swedish insurer will meet with investment banks soon to discuss a possible debt offering as part of the refinancing effort. A Skandia spokeswoman referred the matter to company officials, who were on vacation and did not return calls by press time.

A $455 million non-recourse finance loan for Tenaska Alabama II Partners is nearing the end of syndication, while Tenaska Energy has two more projects in the pipeline this year, said Michael Lawler, v.p. of finance and treasurer for Omaha, Neb.-based Tenaska Energy. Lawler said that two other deals are being prepared, but he declined comment on the names of the projects, banks leading the deals, timing or amounts. A source said that the two deals would total more than $1 billion.

Oshkosh Truck Corp. is set to close a $140 million term loan "B" add-on by July 23, with proceeds going toward the acquisition of a European company. Charlie Szews, cfo, says the company pursues acquisitions on an annual basis and decided that an add-on would be the cheapest and most con venient form of financing. "We're not seeking a lot of money, so it wouldn't be worth it to pursue a whole new deal," he said. "This is just the most effective approach. The high-yield market is choppy at best right now; we'd be paying a higher rate." The Oshkosh, Wisc.-based company makes heavy-duty vehicles for the defense, fire and emergency, and commercial industries.

UBS Warburg's longtime fixed-income senior economist Jeff Palma has given up yield curve watching and data forecasting to join his firm's nascent global asset-allocation group. Palma, who is part of a two-person group currently headed by Larry Hathaway, will be responsible for making asset-allocation calls on global bonds and equities. He says that he has been concentrating on analyzing relative value fixed-income ideas, given his bond background. Jim O'Sullivan, who recently joined the U.S. economics group fromJ.P. Morgan, will assume his senior U.S. economist duties. O'Sullivan reports to Maury Harris, chief U.S. economist.

The $1.5 billion deal for Los Angeles-based Univision Communications is set to close on July 9, after a strong syndication. The credit, led by BNP Paribas and J.P. Morgan Chase, comprises a $500 million revolver and a $1 billion term loan priced at LIBOR plus 11/4% and backs the acquisition of stations from USA Broadcasting, Raycom Media and Equity Broadcasting. J.P. Morgan is administrative agent and BNP Paribas documentation agent.