Search results for

A week after Dade Behring announced a bankruptcy reorganization plan, its debt traded heavily on speculation that holders are well-positioned. Approximately $23 million changed hands early in the week, but levels remained stable around 80. "People are starting to see a little more value in the name and feel there could be some sort of take out or positive event," a dealer remarked. Specifics on the restructuring could not be ascertained, but a few dealers speculated that a debt for equity swap was helping push the debt. They said if banks got equity, that would put them in a better position as the company reorganized and pulled out of Chapter 11.

Barclays and J.P. Morgan are launching a $100 million credit for Itasca, Ill.-based PrimeCo Personal Communications, the Chicago-based service provider that is being acquired by Clarity Partners and Pacific Capital Group. Green Leaf Ridge Company, J.P. Morgan Capital Partners and Tregan Partners are in on the acquisition, which is being primarily funded by equity. Calls to officials at the buyout shops were referred to a spokeswoman for Clarity, who declined comment on the terms of the acquisition or the proposed loan. Calls to officials at Barclays and J.P. Morgan were not returned.

Charter Communications' debt softened to 99 3/8 in a $2.5 million trade last week. Dealers say rumors of more cable paper pushed levels down. It could not be determined which firm traded the piece. Dealers believe another cable deal is in the pipeline, although specifics could not be determined. "It's either Charter's doing a new deal or another cable company," a trader speculated, regarding the expectation that an increase in cable paper may be on the horizon. Charter, a cable systems operator with more than six million subscribers, is based in St. Louis, Mo. Another dealer noted that Comcast's move to buy AT&T may also flood the market with additional cable paper.

Credit Suisse First Boston and National City Bank held a bank meeting July 25 for Cleveland-based chemical company Ferro's $900 million credit. The loan backs the $540 million acquisition of dmc2, OM Group's electronics materials, ceramics and pigments operations. It also refinances debt. The package consists of a $200 million, 364-day revolver that carries a 3/8% commitment fee, a $400 million, five-year revolver that has a 1/2% commitment fee and a $300 million six-month bridge loan. The out-of-the-box spread is LIBOR plus 2%. CSFB is the syndication agent and National City has the administration role. The credit is rated BBB-/Baa3. Officials at CSFB and National City declined to comment.

Spectrasite Holdings' bank debt traded down slightly to the 93.75 range last week, which is down from 94 1/2. Dealers say tower credits are starting to feel the weight of telecom paper. Charter Communications' bank debt traded at 99 3/8, down a quarter of a point, in a $2.5 million swap. Rumors of more cable paper coming out have softened levels, dealers say.

Commonwealth Investment Management, a division of Australia's Commonwealth Bank Group with AUD34 billion (USD17 billion) in assets under management, expects to make its first use of credit-linked notes and credit default swaps on Aussie names. Francois Kong, head of fixed interest in Sydney, said the firm is studying using such instruments particularly for its AUD1 billion high-yield fund, to hedge credit risk, as well as to gain synthetic exposure to certain credits. The investment manager plans to throw the internally seeded fund open to external investors and anticipates using credit derivatives as the fund grows.

Credit Lyonnais recently hired Sonia Lee, a credit derivatives trader at the Industrial Bank of Japan in Hong Kong, in the new position of v.p.-Asian credit trader. Lee said when IBJ's credit desk moved back to London she wanted to stay in Hong Kong. The move is understood to be part of a push into credit derivatives initiated with the recent appointment of Omar Abukhadra as global head of credit derivatives in London (DW, 7/9).

Credit Suisse Group has agreed not to hire any Morgan Stanley employees until mid-September, a move widely seen as a condition of the severance package under which John Mack, president and coo, left Morgan before joining Credit Suisse First Boston as chief executive. Human resources managers at CSFB sent a copy of the agreement, which covers employees at every level at Morgan, to recruiters last Monday. Mack did not return calls. Press officers at CSFB and at Morgan Stanley declined comment.

Deutsche Bank has recently received approval from the central bank, Bank Negara, to set up an equity derivatives operation in Malaysia. A Deutsche Bank spokesman in Singapore said the firm has received a license allowing it to enter equity swaps, equity forwards and to sell equity-linked notes in Malaysia. The German bank is restricted to on-shore transactions. An official at Bank Negara in Kuala Lumpur said it does not comment on the activity of individual banks.

A recent flurry of attention on the impact of new accounting regulations, Financial Accounting Standards 133 and International Accounting Standards 39, has highlighted two key questions. First, why should any accounting regulation affect derivatives trading? And second, has there been a significant change in trading?

U.K. fund manager Friends Ivory & Sime, with GBP37 billion (USD52.8 billion) under management, plans to ramp up its use of equity derivatives to enter or unwind positions and is looking to recruit a derivatives manager to handle the additional business. Ian MacFarlane, head of strategy in London, said the manager wants to use derivatives to temporarily change its level of participation in indices. If it decides to extend the maturity of a position it will gradually replace the derivative position with cash, allowing for better execution.