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Bank of America's pull back from corporate lending is starting to be felt in the market, as treasurers look for new leads and competitors step up for the vacated roles. J.P. Morgan Chase landed the lead spot onIntegrated Electrical Services' $150 million revolver after B of A informed the company that its lending relationship would be one of those dissolved as the bank sought to withdraw approximately $20 billion of its position in the loan market. Neil DePascal, v.p., treasurer and chief accounting officer for Integrated, said he was not aware the bank was curtailing its lending relationships until the company went to renew its facility in March. "When B of A withdrew, it allowed the others to grab the business," he said.

Commerzbank Securities is continuing the process of reorganizing its New York bond business (BW, 4/15, 11/6/00), this time by consolidating much of the management of its daily bond trading activities in the hands of Ashwin Kumar, the New York-based head of fixed-income proprietary trading, according to fixed-income co-chief Ricardo Pascoe. Pascoe says the move has yet to be announced, pending completion of a standard internal review process. To effect the shift, Pascoe confirms that management of the government and agency trading operations will be carved out from Stephen Creaturo's role as head of fixed-income trading, but he'll retain the rest of his duties. Similarly, Steven Block, the head of interest rate derivative trading in New York, will also have his management mandate shifted over to Kumar. The move will leave Kumar with oversight of all interest-rate derivative, agency, government and proprietary trading activities. Creaturo was traveling last week and could not be reached for comment. Block, when reached at his desk, declined comment. Kumar, who declined comment as well, reports to Pascoe.

Credit Suisse First Boston last week launched syndication of a $175 million asset-based revolver for Antec Corporation. The three-year loan is grid priced at LIBOR plus 31/4 %, with a commitment fee of 1/2%. CIT Group is administration agent. The loan backs Antec's proposed acquisition of Nortel Network's ownership interest in Arris Interactive L.L.C., and working capital needs following, said Jim Bauer, head of investor relations. The acquisition is awaiting approval from the Securities and Exchange Commission.

Stewart Enterprises, a provider of funeral homes and cemeteries, is facing a costly refinancing through Deutsche Bank and Bank of America's $550 million credit. David Peknay, director of corporate ratings at Standard & Poor's, said the existing bank facility and notes due '03, are at favorable terms, but the choice is either to refinance and pay the new rates or not refinance and not pay the existing debt. Stewart is no longer investment grade and so banks want tighter security provisions and interest rates are higher, said Peknay.

The distressed market was in high gear last week, with an estimated $300 million changing hands as the tide begins to turn and investors start to go after the reams of paper dumped into the market over the past several months. One dealer said last week's volume was about double what is normally done in the distressed market in a typical week.

Moody's Investors Service has downgraded Choctaw Generation Limited Partnerships's $470 million senior secured bank loan rating from Baa2 to Baa3, due to continuing delays in the construction of the Red Hills Generation Facility power plant. A recent fire during construction has further delayed the project, and under a purchase power agreement between Choctaw and the Tennessee Valley Authority beginning June 1, Choctaw may be obliged to cover the cost of providing replacement power to the TVA should the plant not have commenced operations by new year. Due to alleged changes in labor conditions that have been presented by the contractor, the rating is under review for possible further downgrade.

Casual Male Corp.'s $135 million in debtor-in-possession financing throughFleet Retail Finance will pay off more than $97.9 million it owes under a pre-petition loan agreement with several lenders as well as roughly $3 million it owes under another pre-petition loan with Fleet. Michael O'Hara, the company's first senior v.p. and general counsel, said that the Canton, Mass.-based retailer has filed for Chapter 11 bankruptcy and the loan will fund the business as it emerges over the next year, rather than see an enforced sale of assets. Until February, Casual Male was known as J. Baker Inc.

Franklin Templeton Investments is reportedly in the process of warehousing assets for a $400 million collateralized debt obligation--Franklin Templeton CLO II-- which will have an underlying asset base comprising 95% leveraged loans and 5% high yield bonds, according to market sources. Chauncey Lufkin, portfolio manager at Franklin, declined to comment on the vehicle. Merrill Lynch will underwrite the deal and is reportedly also stepping up as an equity investor. Officials at Merrill Lynch did not return calls by press time.

Patrick Steiner, head of European high-yield and high-yield telecom research at J.P. Morgan Securities in London, will become a principal at Octagon Credit Investors, according to a J.P. Morgan insider. Octagon is a leveraged loan and high-yield private equity investment firm with some $1.75 billion of assets under management. It is owned by its senior management andJ.P. Morgan Chase & Co., but independently operated. James Ferguson, who is still a senior portfolio manager, founded it in 1994. Calls to Ferguson and Steiner were not returned.

J.P. Morgan Chase has been selected as the principal lead arranger for the proposed credit facility backing Domtar Inc.'s, $1.65 billion acquisition of four paper mills from Georgia Pacific Corp. that will likely lead to a $750 million term loan. Jean Sebastien Van Brugghe, manager of investor relations for Montreal-based Domtar, said a bridge facility of $1.65 billion will be put in place, in order to demonstrate that Domtar has the financing to fund the acquisition, and enable Georgia Pacific to pay down their own debts.

Sensing a $3 billion deal could struggle in the current market, Kroger Company opted to avoid rolling up two separate credit facilities and instead went to market with a smaller deal. The company, which merged with Fred Meyer a year ago, opted to refinance and reduce its existing $1.9 billion deal, cutting it to $1.6 billion. Larry Turner, treasurer, said the company will refinance the roughly $1.1 billion existing Meyer facility next year. "We expect that a year from now we'll need less money," he explained. Turner said the new facility offers additional flexibility. Kroger's former credit was done in 1997, and the Meyer facility a year later, when "it was a sweet spot for borrowers. The lenders would call it a trough."

Metropolitan West Asset Management has hired Hahn Kang as specialist portfolio manager in charge of ABS, according to Tad Rivelle, MWAM chief investment officer. Hahn joins MWAM in Los Angeles from Lehman Brothers in New York, where he worked for seven years as an ABS trader, with a focus on secondary prime mortgage ABS. He will report to Rivelle. Kang says that his position was newly created, in order to give the asset management firm a new exposure in the ABS business.