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Voyager Asset Management will continue to reallocate assets to the spread sector, especially corporates, on the view that the drop in interest rates will add more fuel to the rally in the single-A and above corporate bond sectors, says portfolio manager Greg Poplett. Poplett, who heads a team running $7 billion, recently purchased a 10-year Bank of America deal, the 7.40% notes of '11 (Aa2/A), a trade he financed by selling 10-year Treasuries.

Principal Capital Management is considering bringing its MBS allocation up to an index-weighting of 35%, from its current underweight of 28%, a move that would add up to $320 million. Portfolio manager Lisa Stange, part of a team that manages a $4 billion "core-plus" portfolio, says a decision will be made when the April prepayment figures are released. She argues that once the figures are out in the latter part of May, a majority of eligible homeowners will have refinanced their mortgages, thus normalizing prepayment speeds. With the refi wave cresting, this will improve the technical situation in the current coupon sectors. She declines to speculate on what paper she would buy to bring her allocation up to a market weighting.

Shurgard Europe, a Belgian self storage operator, increased its E140 million ($129 million) credit facility to E215 million ($198 million) as market conditions prevented the company from obtaining the E250 million ($230 million) facility it had originally discussed with bankers. Patrick Metdepenninghen, cfo, said the company will go back to the market this April to raise the remaining portion it was seeking with hope that conditions in the European loan market will improve by that time. "We didn't get as much as we wanted, but we will be back in April to look for another $78 million," said Metdepenninghen. He declined to discuss banks he has contacted. The credit was launched at the end of September, but syndication did not close on the facility until the end of February.

Caremark Rx signed a $550 million credit facility this month for operating expenses, sticking with the bank group that had stuck with it. "We had discussions [with other banks], but we chose to stay with the group that had supported us when we weren't as good of a credit risk," said Howard McLure, executive v.p. and cfo. Bank of America is the lead arranger. J.P. Morgan Chase is the syndication agent, and First Union National Securities is the documentation agent. McLure added that the deal was well supported in the market. "We ended up with two-and-a half times what we went out for," he said. The credit replaces a $400 million deal due to expire in June. McLure explained that the company was able to secure a larger deal by coming through on promises it made to its lenders.

A $5 million piece of Charter Communications' bank debt traded early last week at 99 1/4, which is down from 99 3/8 two weeks ago. Dealers say a $300 million add-on will pay down the revolver, but put new telecom paper in the market. "The more supply out there, the weaker the levels," said a dealer. The cable provider, based in St. Louis, Mo., serves more than six million subscribers throughout the country. Charter "B/C" paper was bid at 100 1/4 just last month (LMW, 2/21). Buyers and sellers could not be determined by press time.

Deutsche Bank is in the market with a $135 million, two-part deal for Leonard Green & Partners for buyouts of both Korea Times Los Angeles and International Media Group. Jonathan Seiffer, partner at Leonard Green, said the first part of the credit--a $60 million piece comprising a $10 million revolver and a $50 term loan "A" was underwritten by Deutsche Bank and will fund the acquisition of International Media Group.

Market sources said Dresser Equipment's $820 million credit--the largest LBO deal of the year so far--has more than $1.5 billion in commitments since its launch last week and UBS Warburg and GECC have come in on the deal as agents. Bankers said the strength of the deal has prompted the pro rata to do as well as the term loan "B" in what has been a tough pro rata market. Bankers said leads would no longer accept commitments on the term loan "B" piece of the credit this week.

Perry Beaumont, a longtime sell-side bond research pro who once ran Smith Barney's global fixed-income research effort, is opening a money management shop that will focus on "low-alpha" assets like Treasuries and agencies. East Hampton, N.Y.-based Beaumont, who just completed a two-year stretch as head of fixed-income research for the French insurance and financial holding company giant AXA, is confident that he can grow the asset base to the target level of $3 billion. He argues portfolio managers are going to be motivated to outsource low risk sectors, and focus on more complex sectors where returns are greater, like high-yield and MBS.

Many bankers were speculating on whether Deutsche Bank will be able to pull off its $400 million deal for FairPoint Communications as Nextel Partners announced it will not move forward with its $600 million add-on deal in light of what it sees as unfavorable pricing in an unfriendly telecom market. And as bankers see it, Fairpoint may suffer a similar fate. Officials at FairPoint did not return calls.

FleetBoston Financial's $200 million broadcast deal for Michigan-based Saga Communications came in oversubscribed at the end of the last week. Fleet acted as lead arranger and Bank of New York was syndication agent. Bank of Scotland, SunTrust, Union Bank of Caifornia, and Bank of Montreal are some of the other players on the nine-bank syndicate. It has not been determined whether the facility will be increased.

An auction for Integrated Health Services' bank debt resulted in a trade at 42 1/2 from 43 as dealers cited a softening bank debt market but noted health care is on its way up. Levels were quoted at 40-42 later in the week. The size of the piece could not be ascertained. "The bonds have come back down. People are just taking a breather right now," said a trader. "Distressed prices have run up, and people are just stepping back." In early March, Integrated Health was bid at 39 1/4.