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Colonial Management Associates, an investment management arm of Liberty Funds Group, has been buying the intermediate bonds of electricity generation companies because industry operating prospects remain excellent for the year, according to portfolio manager Richard Stevens. Stevens recently participated in theLehman Brothers led 8.30% Mirant Americas (Baa3/BBB-) senior notes of '11 144a offering two weeks ago, and has also been adding or establishing positions in NRG Energy (Baa3/BBB-) and Avista Corp. (Baa2/BBB). He argues that the cash flow thrown off by these companies will be enough to warrant possible consideration for upgrades, worth in his estimation an additional 20 basis points or so of tightening. He also says that at average spreads of 230-280 basis points off treasuries, paper in this sector has the opportunity to tighten into the sub-200 range.

Evergreen Investment Management, a Boston-based subsidiary of First Union Bank's capital markets arm, is watching for a continued rally in commodity prices as it prepares to increase exposure in low-rated, zero coupon, deferred interest bonds. Prescott Crocker, senior portfolio manager responsible for $1.2 billion in taxable fixed-income, says he will look to invest some $100 million to in seven- to 10-year paper offered by wireless telecom companies. Names he likes include wireless companies like Nextel (B2/B), Tritel (B3/NR), and Triton (B3/CCC+) because they have less competition, and more opportunities to attract new subscribers.

Lord, Abbett & Co. is planning on increasing high-yield exposure by $150 million on the view that spreads will tighten another 100 basis points over the course of the year and that credit products will outperform treasuries and MBS because the Federal Reserve easing will boost the economy. Chris Towle, portfolio manager, says the fund would reduce its investment grade and MBS exposure by the same amount.

Firstar Investments, a Milwaukee-based investment advisor, expects gradually to increase corporate debt allocation, perhaps by as much as $200 million by year-end, as it expects industrial and financial sector credits to benefit from monetary and fiscal policy moves, such as rate cuts and expected tax breaks. Brad Peters, senior v.p. and portfolio manager of the $2.5 billion in taxable fixed income, expects to sell Treasuries maturing in either less than two years, or more than 10, to finance the move. He has been shifting to a narrow barbell position which is duration neutral to the 5.5 year Lehman Brothers Government/Credit index to take advantage of a steepening in the treasury yield curve. He would not discuss specific companies or credits, saying that what he picks up will depend upon what his brokers have in their inventory that look like a good buy.

This chart, provided by Citibank/Salomon Smith Barney Inc., tracks bid-ask prices for par credit facilities that trade in the secondary market. It also tracks facility amounts, ratings, pricing and maturities.

Adelphia Communications Corporation is looking for banks to finance $3 billion in loans before the end of the third quarter. According to Telecom Financing Week, a sister publication, Karen Chrosniak, director of investor relations, declined to specify what the capital will be used for, but added that Adelphia, the nation's sixth-largest cable operator, is currently in discussions with a number of top firms about arranging the facility. "We're talking to the banks, but nothing has been decided," Chrosniak said. Analysts who follow the company say Adelphia may look to make further acquisitions with the capital.

Some analysts are becoming worried that corporate credit deterioration will soon provoke some real damage in the CDO market, a trend not seen yet. According to sister publication, Bondweek, several CDO tranches are severely stressed, according to Gus Harris, managing director with Moody's Investors Service, who predicts that some will likely default by their maturity date: which would be a first. "We are at the peak of feeling the pain of the bad vintages of 1997 and 1998," says Anthony Thompson, head of CDO research with Deutsche Bank. The newer CDO vintages for 1999 and 2000 will perform much better, he adds.

The institutional market devoured Credit Suisse First Boston's $325 million term "B" of the $625 million Playtex Products deal launched this week. Bankers said the deal blew out roughly an hour after launch with CSFB raising roughly $600 million on the piece. The bank is expected to close down the tranche much earlier than expected. Officials at Credit Suisse First Boston said the firm is still accepting commitments but declined to comment further. Officials at Playtex Products declined to comment.

Mike Mullaney, a longtime fixture in the bond management world of Boston, most recently at Boston Partners, where he was head of taxable fixed income, is leaving to take an equity portfolio management job at Fiduciary Trust Corporation in Boston. Mullaney says that after 18 years of bond management, including a 14-year stint at Putnam Investments, he was looking for a new challenge. He says he is looking forward to working with FTC's growing high net-worth individual practice, and that he will start in the "next couple of weeks." Bill Leach, who will run the Boston Partner's bond efforts out of its Los Angeles office, will replace him. Leach did not return a phone call seeking comment by press time.

News of a bidding war for control of Finova Group sparked a flurry of small trades totaling $25 million in the ballpark of 83 1/2 early Thursday. The bid-offer spread was quoted at 83-84 1/2, up from 81. Meanwhile, dealers cautioned the counter offer by GE Capital was just that, an offer, and still too preliminary to impact levels. "It will still be sloppy," said a dealer. "There's just too many questions. A bid is only a bid; it's not firm." A spokesman at Finova did not return calls.

Del Monte Corporation's $325 million revolving credit and $415 million term loan "B" has been assigned a Ba3 rating by Moody's Investors Service, reflecting the San Francisco fruit and vegetable giant's relatively low potential for organic volume and price growth and the potential for disruption from the energy crisis in California. But the report, written by senior analyst Helen Calvelli, also cites company's strengths, such as its dominant market position, brand equity, and the relatively stable underlying long-term consumption trends for its products.

Barclays and ING Barings, co-arrangers on a five-year, $600 million revolving credit facility for London-based Inmarsat Holdings Ltd, launched syndication of the loan last week with the expectation of completing the deal by the end of the month. Ramin Khadem, cfo of Inmarsat, said the loan is for general corporate purposes and will replace a $400 million bridge loan signed at the start of this year used for short-term financing needs. The banks were chosen based on previous relationships they had with the company, he added. Inmarsat is an operator of global satellite systems for communications.