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Moody's Investors Service has upgraded Stryker Corporation's $1.65 billion senior secured credit facility. The shift from a Ba1 rating to an investment grade Baa3, is a result of positive operating trends, the successful completion of the Howmedica integration and further confidence in the management's commitment to achieve and maintain an investment-grade profile. The Kalamazoo, Mich.-based company is a manufacturer of specialty surgical and medical products. Since the Howmedica acquisition in 1998, total debt has been reduced by approximately $412 million to $1.09 billion. Leverage as measured by debt/EBITDA ratio has decreased to 1.8x from 3.5x in 1998. Moody's anticipates that Stryker will continue to focus on improvements, though there are concerns that the company will make acquisitions that may impact debt reduction measures.

First Union's marathon $2.6 billion deal for Suiza Foods, backing the acquisition of Dean Foods, is almost over, but not until another $200 million is added. Cory Olson, treasurer, said documentation is still to be sent out and there is the potential to increase the line $200 million to $2.8 billion. Final closing is expected in late July, when secondary trading will begin, Olson added, declining all further comment until closing.

Margaret Cannella, a retail analyst at J.P. Morgan Securities and an Institutional Investor first-team member in 2000, sees JC Penney (Ba2/BBB-) as a good buy in spite of a generally grim picture for retail. Portfolio managers are wary, however. Cannella notes that the company's 7.6% of '07 went up a point to $92.50 from May 25 to June 25, while bonds of similar maturities for WalMart Stores (Aa2/AA), Target Corporation (A2/A) and Federated Department Stores (Baa1/BBB+), fell by two, six, and 10 points, respectively. Cannella says the credit "could trade up a bit more" through the end of August, because it has managed its finances well and fully expects to meet earnings forecasts. She declines to set a target for fair value.

Triton Partners is marketing a $300 million collateralized debt obligation backed by other CDOs. Triton CDO Opportunities I is the first CDO of CDOs for the manager and it comes as the market for such vehicles is heating up, according to BondWeek, an LMW sister publication. The deal will be lead managed by Morgan Stanley andTD Securities in New York, according to market sources. Word in the market is that the equity tranche, which represents the most challenging part of the deal to sell and only 6% of total liabilities, has already been sold and marketers are in the final stage of selling the debt to the more conservative debt investors.

Two banks have committed $55 million to a $125 million line for Capital Pacific Holdings led by Bank One. Fleet Securities chipped in $40 million while California Bank & Trust has committed $15 million. The bank meeting was held two weeks ago, according to a Bank One official. Three to five additional lenders are being sought. Up-front fees range from 20 to 40 basis points, depending on commitments, he said, declining to elaborate.

Dealers last week were keeping a close eye on asbestos credits, expecting that after USG Corporation filed for Chapter 11 bankruptcy the last two standing would soon follow. "Everyone's waiting on Crown Cork & Seal and Owens-Illinois," a dealer remarked. He believes that bankruptcy protection is a short-term solution to a long-standing problem. "[Chapter 11] might protect these credits for now, but it will prolong the inevitable," he said. Early last week Owens Corning traded down slightly to 62-63 in a $20 million trade. A spokesman from USG declined to comment. Calls to officials at Owens-Illinois and Crown Cork were not returned.

The primary market is winding down fast as we head into the July 4 holiday week and then into summer. A total of $11.8 billion came to market with higher quality borrowers concentrated in the very short end of the curve and lower credit companies continue to lock in absolute rates that look attractive on a historic basis. Notable deals for the week include: Mission Energy Holding (Ba1/BB-), which managed to cobble together $800 million in demand. The funds will be funneled up to the parent, which will stave off bankruptcy until fall pending additional relief from the California Legislature; Egypt (Ba1/BBB-), which is set to price its first international offering; and Bombardier (A3/A-), a relatively new borrower in the Yankee market. With junk deals making up over 1/3 of new issues, the weighted average credit quality on the week declined to mid/high BBB.

Chicago-based GATX Capital recently increased its $300 million credit to $425 million to support an expanding commercial paper program. Robert Lyons, director of investor relations, said GATX added Salomon Smith Barney as joint lead arranger and bookrunner. "Salomon was chosen based on a longstanding relationship, rather than a formal bidding process," he added.J.P. Morgan Chase leads the loan for the company, which provides asset-based finance across numerous industries.

Genesis Health Ventures traded up to 71 1/2 after dangling for a month in the low- to high 60s. Genesis and The Multicare Companies filed a joint plan of reorganization on June 5 in the U.S. Bankruptcy Court. Multicare's levels are said to be in the low 70s, also up slightly. "Multicare and Genesis settled with unsecured debt holders and bond holders, and that helped to push the price up," said a dealer.

Global Crossing's bank debt notched up then softened last week in a $3 million trade. Dealers reported levels inched up to 941/ 2 from 90, and later reports indicated the levels had come back a bit to the 92 range. With the telecom sector getting hammered these past few weeks, a dealer attributed the trade to luck. "Someone saw an opportunity and hit it," a dealer said. Calls to the company were not returned.

Hollywood Entertainment's bank debt traded last week at 96, up from 90 early in the month. The seller was rumored to be Sumitomo Mitsui Banking Corp., which has reportedly been an especially active seller lately. The buyer could not be ascertained. A bank spokesman declined to comment on trading levels. Hollywood Entertainment, based in Wilsonville, Ore., is the number two video rental business behind Blockbuster. Calls to the company were not returned by press time.

Independent fixed-income research outfitsCreditSights, based in New York, and Gimme Credit, based in Chicago, are attracting attention for their calls on the credit safety and relative value of high-profile primary and secondary market bond issues. The value of heeding advice provided by firms that have no economic interest in trading or underwriting bonds has been heightened by the $250 million Goldman Sachs-led Cummins Engine convertible preferred (Ba1/BB+) offering and the recently completed offering for Mission Energy Holding (Ba2/BB-), according to portfolio managers and analysts.