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Conning Assert Management, a money management firm in Hartford, Conn., has been dipping in to stable, non-telco credits in recent weeks in the new issue market. Among the trades, the firm applied for $50 million and got $20 million of Alcoa 6.5% of '11 ( A1/A+). Karen Kelleher, senior portfolio manager, says the 110 basis points over treasuries price is quite wide for such a stable company, which would have traded at 60-80 over 2 or 3 years ago. She believes spreads will narrow, and cites the good fundamentals for the aluminum industry.

Mitchell Capital Management swapped out of some treasuries two weeks ago by adding agencies and corporate bonds. The firm's treasuries allocation was cut by 8%, because government bonds have been bid up too much in value, says Ken Green, portfolio manager in Kansas City, Mo. However, he is comfortable with his current treasury allocation and does not plan to decrease it further.

Westwood Capital Management, a Dallas-based money manager, has been buying longer maturity off-the-run U.S. treasuries as yields climbed over 6% late last month. Portfolio manager Mark Freeman says he increased his Treasury allocation by 2% in the move. Freeman, who manages $700 million in taxable fixed income, may look to make further increases to his position in off-the-runs maturing in '23 and '16 if the economy appears to be stabilizing, indicating that the Federal Reserve has come close to the end of its easing cycle. He says the expected modest, rather than drastic, drop-off in consumer spending rates would be one important sign of such stabilization. He would finance the move by using new cash and selling intermediate-term treasuries.

Brian Walter, a high-yield trader, has left Lehman Brothers to join UBS Warburg's high-yield desk, reporting to Rob Heffes, himself a Lehman alum. Heffes says he hired Walter because he proved his skill during their earlier association at Lehman, as well as to fill a void created when Rich Sullivan went to J.P. Morgan Securities earlier this year. Heffes says he may consider further hires to meet his desk's increased demand as the high-yield market grows.

Moody's Investors Service downgraded the ratings for WKI Holding Company (World Kitchen) to Caa1 from B2 as the credit continues to actively trade in the secondary market. Approximately $617 million in senior secured credit facilities are affected. Moody's lowered the rating due to uncertainty of the company's restructuring plan. "They're closing down U.S. plants and trying to outsource manufacturing by going overseas. It's a big undertaking," said Nancy O'Connor, v.p. and senior analyst. "After they bought and merged EKCO and General Housewares, they must take the next step, which is closing plants to reduce overhead. It's uncertain whether they'll have additional losses." WKI, based in Elmira, N.Y., is a manufacturer and marketer of household products.

Tenneco Automotive's bank debt traded up to 85 from 77-80 last week on a more active distressed market and an improved sector. Approximately $5-10 million changed hands. Dealers reported that the automotive sector is stronger and that Tenneco's levels are up 15 points from where they bottomed out when the automotive sector crashed late last year. The Lake Forest, Ill.-based company manufactures shocks and struts as well as exhaust systems.

UBS Warburg, Morgan Stanley and Bank of New York held a bank meeting last Thursday for a $150 million senior secured revolver for Key3Media Group. The Los-Angeles based producer of technology tradeshows and conferences is refinancing debt via a proposed underwritten public offering that will wipe out $300 million of bank loans and $84 million of zero-coupon debentures. The three banks are also the lead underwriters of the note offering. Officials at the company did not return calls by press time.

No merger spelled lower levels for Lucent Technology, following an announcement late last week that it would not be merging with France-based Alcatel. Levels fell slightly to the 91 1/2 range. Dealers noted there continued to be strong supply. Lucent, based in Murray Hill, N.J., is one of the top manufacturers of telecom equipment and software. Calls to Lucent were referred to a spokesman, who did not return them.

Credit Suisse First Boston's $3.5 billion deal for Atlanta-based energy giant Mirant Corp. has been downsized to $3 billion and has had pricing flexed upwards. Project financiers predicted that the deal would be tough, suggesting that CSFB would have to tap most of the major power finance houses to get a package of this magnitude done. Recent construction revolvers from NRG Corporation and American National Power also proved tough sells.

Morgan Stanley this Friday will launch syndication of a $900 million credit for Fort Lauderdale, Fla.-based Extended Stay America, Inc. The credit comprises a $200 million revolver, a $50 million funded "A1"term loan, an unfunded $150 million "A2," and a $500 million "B" term loan. Extended Stay is also planning $300 million in bond issuance. The credit and notes are part of a refinancing of the existing $998 million bank debt, set to mature in 2002. The company, which provides extended stay lodging, had approximately $200 million available under the old credit.

Prison Realty's bank debt notched up a couple of ticks to 94 last week in a $5 million trade. Dealers said a need for paper that isn't in the telecom sector has helped support levels, but buyers and sellers could not be determined by press time. The company is based in Nashville, Tenn., and constructs and sells prisons. It also goes by the name Corrections Corporation of America. Calls to a company spokeswoman were not returned by press time.

Nick Casesa, a senior member of Barclays high-yield sales team, left late last month to join BNY Capital Markets in Roseland, N.J. He was at Barclays for just over a year, prior to which he worked at Prudential Securities, according to an industry official. Casesa reports toChris Harrison. Casesa and Harrison declined comment on the move. Jack Flaherty, head of high-yield and investment grade corporate bond trading at Barclays, says Casesa has not yet been replaced.