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A Japanese bank sold an $11 million pro rata piece of Safety-Kleen's bank debt last Wednesday in an auction at 42 1/2, down slightly from 43-45 the week before. Sumitomo Mitsui Banking reportedly sold the pro rata piece and Deutsche Banc Alex. Brown was rumored to be the buyer, but officials at both banks declined to comment. Dealers say there's still a lot of uncertainty about the company, noting that financial statements are about to be delivered to the banks in a meeting later this month. "A bank meeting is coming up, and people may be taking a positive view from the events coming up," a trader said. Another noted that the company, "hasn't gotten its arms around the problems yet." Details on the upcoming meeting could not be determined.

Standard & Poor's in New York has added several new staff members to its North American ABS group, according to Patrice Jordan, global head of ABS/MBS. Jordan says S&P is building up because the ABS business is very strong as well as to replace staff that recently moved on.

A Salomon Smith Barney report saying oil-driller Pride International's (Ba3/BB) all-stock acquisition of Marine Drilling "may result in an investment-grade rating for the new Pride International once the acquisition closes," is being met with skepticism by the buy- and sell-sides. Though many pros believe the acquisition will result in an upgrade because Marine Drilling has very little debt and the acquisition was conservatively financed, they do not see Pride climbing the full two or three notches to make the cut. Keith Petersen, the energy analyst at SSB who issued the report, referred calls to a firm SSB spokeswoman, who declined comment.

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.