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Offers for Federal Mogul's bank debt have pulled back to the mid-60s from the high 60s and an analyst said it may be heading for a covenant violation if the company's current trend continues. Market players say the paper hasn't traded in weeks as the flurry of companies filing for Chapter 11 has put market players' attention elsewhere. The Southfield, Mich.-based company makes components for cars, trucks, and construction vehicles. Calls to a spokesman were not returned.

First Union is the sole lead on a $200 million refinancing credit for St. Louis, Mo.-based Graybar Electric after Banc of America Securities decided to walk away from the deal. A banker commented that B of A decided that the relationship was not profitable enough to be a co-lead, a position it has held for the last two refinancings and several years. Officials at Graybar and B of A did not return calls. Bankers at First Union declined to comment.

Bankers are anticipating another deal in the hot health care sector as J.W. Childs Associates and The Halifax Group get set to acquire InSight Health Services for $200 million, with an additional $200 million debt assumption. Bankers said UBS Warburg and Banc of America Securities are likely to have the inside track on the deal, after working on the sale of the Newport Beach, Calif.-based firm. Calls to Halifax and J.W. Childs were not returned. Repeated calls to Thomas Croal, executive v.p. and cfo of InSight, were also not returned.

Milan-based Wind has chosen three banks to lead its 5.5 billion credit facility, and those lenders are interviewing other firms for the remaining spots on the syndicate. A banker familiar with the deal said the Italian operator--the closest competitor to incumbent Telecom Italia--selected J.P. Morgan, Citibank and Dresdner Kleinwort Wasserstein to lead arrange the deal. The trio is looking to add to the list of banks participating in the syndicate. ABN AMRO, BNP Paribas and Intesa Bci are at present in the syndicate. A spokeswoman at Wind declined to comment on the deal, which is composed of two tranches--a 4.4 billion term loan and a 1.1 billion revolver.

Confusion reigned over the status of Mediacom Communications' new bank debt, as the deal reportedly broke for trading and then was halted by agent J.P. Morgan three hours later last Tuesday. "I've never seen this done with a deal that hasn't traded yet," said a confused trader about the halt in action. "I didn't even know it could be done. It usually happens when there's an amendment to a credit." A J.P. Morgan spokeswoman declined to comment. Rocco Commisso, ceo of the cable company based in Middletown, N.Y., did not return repeated return calls for comment.

Moody's Investors Service predicts the high-yield default rate will reach 9.5% by the end of the year, a nearly 67% increase over last year, and Standard & Poor's sees a default rate of over 8% by the end of this year. Furthermore, Moody's says defaults will continue rising into 2002 on the way to peaking in March at 10.1%. David Hamilton, a Moody's risk management analyst, says several factors contribute to the agency's forecast. He says Moody's anticipates the summer will be quiet for speculative grade defaults, but will be followed by a surge in defaults toward the end of the year--a pattern similar to last year when most defaults occurred at year-end. In 2000, the default rate hit 5.7%. Moody's had predicted it would come in at 6%. Diane Vazza, high-yield analyst at S&P, said "We're starting to get some positive economic figures that support the argument for a peak by the end of this year." As of the end of the first quarter, defaults were running at just over 6%, Vazza said.

Levels onNextel Communications' bank debt strengthened last week with the bank debt following the bonds' incremental climb to 80. The levels on the bank debt were reported at 92 1/2 to 93 1/4 early last week, which is up from trading levels of 90 three weeks ago. Nextel, one of the most liquid and strong names, had recently sagged a little as the telecom industry has plunged.

A $10 million piece of Owens-Corning's bank debt traded at 62 1/2 last week, reportedly in an auction, but traders could not confirm that one took place. The company's levels have jumped around over the last couple months, spiking from 61 to 65, then settling in the 62 range. Owens-Corning, based in Toledo, Ohio, is one of the world's largest fiberglass manufacturers.

About $30 million of Pacific Gas & Electric's bank debt traded last week at 69-70, which is about level to previous trades. Buyers and sellers could not be determined by press time. A dealer noted that as California gets a better grasp of the energy crisis, levels on PG&E's credit should start to move up. "They're starting to price and place where they should trade. Things should improve," he said. PG&E, based in San Francisco, Calif., is one of the largest utility holders, serving gas and electric customers in central and northern California. Calls to Peter Darbee, cfo, were not returned by press time.

Rockford Corporation closed a $30 million credit facility with co-leads Bank of America and Bank One to provide financing for future acquisitions. Its existing deal with Finova Group expired earlier this month. James Thomson, cfo, explained that the new deal is structured differently than the previous one to accommodate the company's growth strategy. "We were trying to create a financial structure which includes acquisitions," he said. "We have a working line of credit and an acquisitions line." The old deal was an asset-based loan.

Substantial free cash flow generation and strong demographic trends supporting growth helped earn Univision Communications' $1.5 billion five-year credit a Baa3 rating from Moody's Investors Service. The rating is also supported by Univision's dominant position in U.S. Spanish language television broadcasting and a valuable station group, noted Glenn Eckert, v.p. senior analyst at Moody's. The company's $500 million in senior unsecured notes also received a Baa3 rating. The debt will be used to finance the acquisition of stations from USA Broadcasting, Raycom Media and Equity Broadcasting Corporation. Administrative agent J.P. Morgan Chase and documentation agent BNP Paribas launched syndication on June 22. Pricing is at LIBOR plus 11/4%.