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Regal Cinemas is reportedly preparing a new bank deal to retire debt and word of the new credit is pushing up levels on the existing loan. A $10 million piece of the company's bank debt traded last week at 93, up about five points from recent levels. Details about a new deal have yet to be hammered out, bankers said. Calls to a company spokesman were not returned by press time.

The imminent merger between Deutsche Telekom and VoiceStream Wireless has traders viewing their bank debt as one credit, so news on one is affecting the other. Early last week a $10 million piece of VoiceStream's paper traded at 99 3/4, which is down slightly for the name. Traders attributed the move to a ratings downgrade of DeutscheTelekom. "There's some selling pressure on the Deutsche Telekom downgrade and refinancing concerns," a trader noted. Mobile phone operator VoiceStream is based in Bellevue, Wash. Calls to a company spokeswoman were not returned.

Key Bank and Wachovia Corp. have wrapped up syndication on their $350 million refinancing credit for Westlake, Ohio-based Nordson Corporation. A banker close to the situation said that Credit Lyonnais and Bank of Nova Scotia took co-documentation roles. The deal was split between a $100 million, 364-day revolver and a $250 million, five-year revolver. All-in pricing was LIBOR plus 11/2 %. Nordson is a producer of precision dispensing equipment, with applications in consumer and industrial products during manufacturing operations. Nicholas Pellecchia, v.p., finance and controller for Nordson did not return calls.

Although issuance actually picked up on the week ($20.5 billion vs. $13.1 billion the week before), the weighted average credit quality deteriorated (to A-/BBB+) and the deals were on average smaller ($420 million). The primary market continues to be open to a wide range of issuers as this week's calendar shows. Navistar (Ba1/BBB-), a cyclical industrial, was able to issue $400 million in debt and the deal was reportedly three times oversubscribed. In addition to Navistar, another $2.5 billion of split-rated and high yield credits brought debt to market. While the market for straight debt deals posted an average week, the convertible market was on fire due to the rally in equities. Thus far in May, a record $14.2 billion in convertible debt was issued out of a total $50.3 billion year to date.

A rumored buyout of Wyndham International by the British company Bass Hotels & Resorts was said to push up Wyndham's term loan "B" up around 98 7/8 to 99 1/2, while the revolver traded at 99 1/4 to 7/8. One dealer said as much as $20 million of the name may have changed hands. Calls to the company were not returned. A company spokeswoman for Bass Hotels did not return calls.

Several Street ABS research pros say an acceleration of home equity loan (HEL) prepayment speeds are underway, but they are drawing different conclusions on how it will affect the spreads in the sector. Rod Dubitsky, home equity research analyst with Credit Suisse First Boston in New York, says prepayments increased 1% to 2% from March to April for the 1995-1999 fixed-rates vintages, but he doesn't foresee spreads widening as a result. Gyan Sinha, head of ABS research with Bear Stearns, also anticipates an acceleration of prepayment speeds into July, and agrees there should be little pricing change because of this. He adds that HEL premium coupon bonds traditionally trade cheaply from a fundamental perspective. Sinha adds that future HEL buyers in July will have more protection from prepayment risk because speeds should start to slow down by then, as most of the Federal Reserve easing should have taken place.

Charlotte, N.C.-based MedCath Corporation, an operator of cardiovascular hospitals and mobile cardiac labs, has tapped Deutsche Bank and Bank of America to lead an upcoming $220 million credit facility. David Crane, president and ceo, said that First Union and J.P. Morgan Chase will be secondary leads on the credit, which will run concurrent with an equity offering. Syndication of the deal will launch sometime in the summer once the initial public offering is completed, he said.

Bell Microproducts, Inc. recently signed a $175 million credit facility to pay down notes that are maturing next month and raise working capital for potential acquisitions. The facility expires in two years. Eli Sayegh, director of investor relations, said bank debt financing offered the most flexibility for the company. "We've been working on this for months. The one-year notes were due at the end of June, and we wanted to get this over ahead of that," he said. "Equity was out of the question; stock is too cheap at this level. This made the most sense. It gives us flexibility to tap into this as needs came up."

High-yield portfolio managers say the dearth of single-B junk issuance--credits in the middle of the junk ratings ladder--has them sitting on money that they'd like to invest in companies that are slightly less creditworthy, but which would offer more yield. High default levels have prompted a flight to quality, so that issues below rated below double B have become scarce. Single-B issuance for the first quarter comprised 48.5% of the market, the lowest level since 1996, and issues rated triple-C or lower were 16.6%, the lowest percentage of the total since 1993, according to Marty Fridson, chief high-yield strategist at Merrill Lynch.

Deutsche Bank is set to lead a bankruptcy exit facility for Harnischfeger Industries, Inc. in the coming weeks, as it emerges from bankruptcy. The $350 million four-and-a-half-year secured revolver is expected to close in the first half of June, said Kenneth Hiltz, senior v.p. and cfo of the Milwaukee, Wisconsin-based manufacturer of surface mining equipment. Pricing and the date of the bank meeting have not been finalized, he noted. The spread will be based on the total amount of leverage, ranging from LIBOR plus 2-3%, he said.

Duke Street Capital, manager of a EURO800 million CDO--the largest on the continent to date-- is expected to launch the sale of the notes for the deal this week. A source close to the deal said CIBC World Markets will be coming to market with notes supporting the manager's Dutchess I CDO S.A. Pricing on the tranches could not be determined. The vehicle will comprise 65% loans and a 35% combination of mezzanine and high yield debt. The CDO is a regular cash-flow arbitrage deal launching into a market described by the source as favorable in terms of the spread differential between the assets and the bond debt.

Houston-based El Paso Energy Partners, a provider of mid-stream gas services in the Gulf of Mexico, has closed a $600 million, three-year revolving credit facility with J.P. Morgan Chase. The deal comes on the back of a private offering of $250 million of 10-year, 8.5% senior subordinated notes, said Sandra Ryan, director of investor relations. "El Paso has an aggressive expansion plan that includes spending $500 million per year on acquisitions and growth over the next five years," she said, declining to be more specific on potential targets.