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Brentwood, Tenn-based LifePoint Hospital Inc.'s $210 million senior secured credit facility has been upgraded from B1 to Ba3 by Moody's Investors Service, reflecting strong performance since LifePoint's spin-off from HCA-The Healthcare Company in 1999 and a cash infusion of $100 million from a secondary offering. The company has limited competition in the rural areas it operates in and there is a more favorable reimbursement environment, noted Russell Pomerantz, v.p. senior analyst.

Nextel Communications' bank debt traded several times last week, with a total of $25 million changing hands. The company reportedly gave a presentation for Goldman Sachs early in the week stating that earnings will not be down as much as expected, and that reportedly sparked trading. Dealers said approximately $100 million has traded over the last two weeks as market players snatched up the credit for their books. The paper traded up to 96.58 early last week, which was up 3/4 of a point from previous levels. "It's the Allied Waste of old, just constantly trading. It's one of the better names of the industry and EBITDA-positive," a dealer said, attributing the paper swaps to "a lot of inter-dealer stuff."

Octagon Credit Investors is warehousing assets for a $375 million collateralized debt obligation that is expected to close in the next month. A source close to the deal said the manager has been in the market ramping up the vehicle, which will invest 80% in loans and 20% in high-yield bonds. Officials at Octagon declined to comment. The fund is reportedly investing most actively in defensive sectors, such as healthcare, food, and cable.

New York-based Primedia, Inc. is expected to tap the market soon for a $1 billion refinancing credit with J.P. Morgan Chase and Bank of America as the lead banks.Matt Flynn, treasurer for the media company, noted that the firm is in the fifth year of an existing seven-year credit, and it is prudent to replace current indebtedness. The new credit, also a seven-year deal, comes on the back of a successful $500 million 144A senior note issue, the proceeds of which will be used to refinance the credit and repurchase Primedia's existing 10-year notes. The lead on the existing $1.4 billion Primedia credit is Chase, said Flynn, with three other lead titles.

BANK ONE held a bank meeting last Friday for Salt Lake City-based Franklin Covey's $134 million refinancing credit. The bank deal for the personal and organizational effectiveness firm is broken up into a $70 million, three-year secured revolver, $30 million term loan "A" and a $34 million term loan "B." Pricing on the pro rata is LIBOR plus 3%. Terms on the "B" tranche could not be determined.

Bankers are keeping a close eye on the $700 million bank deal for U.S. Industries, speculating that a crucial $100 million junior subordinated debt piece of the financing package may not be filled. The credit, led by Credit Suisse First Boston and Deutsche Bank, hinges on the company rounding up $550 million in subordinated debt, including the $100 million junior piece. CSFB and Deutsche Bank are trying to sign up private equity investors. Officials at U.S. Industries declined to comment. Officials at CSFB and Deutsche Bank did not return calls by press time.

Bankers said First Union at its bank meeting last week offered $25 million pieces of Suiza Foods' much-desired "B" tranche to entice banks to commit $75 million to the pro rata portion of the deal. As first reported on LMW's Web site, the $750 million seven-year term loan "B" came in oversubscribed, but the pro rata, consisting of an $800 million revolver and $1.05 billion term loan "A" may be harder to push, said a banker familiar with the deal. Pricing on the pro rata is LIBOR plus 2 1/2 %, and on the institutional tranche LIBOR plus 3%. Those taking the $25 million will receive commitment fees of 3/8%, and with expectations that the paper will trade as high as 101, bankers can expect to be well compensated for filling the pro rata. Sun Trust has signed on as documentation agent and Bank One is syndication agent. Officials at First Union did not return calls by press time.

A total of $15-20 million VoiceStream Communications' bank debt changed hands last week at 99 5/8 to 99 7/8 as the company gets closer to merging with Deutsche Telekom within the next month. Despite VoiceStream's announcement early last week that first quarter losses had tripled, dealers said the paper's levels were holding up. VoiceStream traded up to 99 1/4 on the announcement that the Federal Communications Commission had approved its merger with Deutsche Telekom (LMW, 4/25). Deutsche Telekom and VoiceStream are set to close their deal on May 31. "That is forcing the market up," a dealer said, noting that the term loan "B" is trading at 99.875 and term loan "A" at 99 5/8.

Westfield America has selected PNC Bank to provide a $92 million construction loan that will be used to renovate and expand a regional mall in Palm Desert, Calif. PNC, which will hold about $30 million, is planning to have a bank meeting in June. It is looking for four to five lenders to round out the syndicate.

A challenging pro rata market for big, well-received deals with blown out "B" term loans has forced lenders and companies to re-think strategies. Bankers said Deutsche Bank has done both on recent deals.

Moody's Investors Service assigned a B1 rating to Crown Cork & Seal's $400 million term loan maturing in 2002 and a B3 rating to the new $2.5 billion revolving credit facility maturing in 2003, due to uncertainty regarding future asbestos claims payments. Recent bankruptcy filings have reduced the number of companies that law firms active in asbestos litigation can target. According to Moody's, these filings could make law firms ever more aggressive in looking for plaintiffs against companies like Crown Cork, from which cash settlement payments can still be obtained within a relatively short period of time after filing of claims. "Law firms are used to receiving cash payments on a regular basis. As the pool of companies diminishes, [law firms] would be more aggressive against the remaining companies," said Christophe Razaire, senior credit officer.