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The Lutheran Brotherhood will be seeking to put new cash and proceeds from interest and maturities to work in real estate ABS throughout this year, because the firm is currently underweight the sector relative to ABS indices, according to portfolio manager Steve Lee. Lee, who manages a dedicated ABS portfolio of $300 million, also reasons that the well-documented trouble of several large ABS issuers within the manufactured housing segment, especially firms like Conseco, Oakwood and Vanderbilt, over the last several years has caused some hesitation among buyers. Particularly interesting to him are the home equity loan and manufactured-housing segments, where he notes that industry fundamentals seem to be improving. Also attractive to him about the sector is the fact that many of these issues trade 10-20 basis points wider than credit-card or auto-loan backed deals, at about 30 basis points off of swaps, but have AAA ratings and broad institutional sponsorship.

Chandler Asset Management is trimming its A-rated corporate bond portfolio to focus on agency paper, Treasuries and higher-quality investment grade corporates, according to Kay Chandler, chief investment officer for the firm's $1.2 billion fixed-income portfolio. The San Diego-based firm recently sold the 7.125% DaimlerChrysler (A3/A-) notes of '02, which, combined with money from interest and maturities, she used to rotate into higher-rated financial and industrial credits.

The bond market has largely priced in an 50 basis point cut in the Fed funds rate for Tuesday's FOMC meeting. Given the volatility of U.S. equity markets, coupled with a spate of economic data releases and the specter of a looming financial crisis in Japan, BondWeek asked veteran economists what their thoughts were for a greater than 50 basis point cut.

The bond market has largely priced in an 50 basis point cut in the Fed funds rate for Tuesday's FOMC meeting. Given the volatility of U.S. equity markets, coupled with a spate of economic data releases and the specter of a looming financial crisis in Japan, BondWeek asked veteran economists what their thoughts were for a greater than 50 basis point cut.

A wave of bad reports from companies is rocking the secondary loan market as never before, as increased liquidity and mark-to-market pricing make bank debt much more sensitive to bad news. A slower economy and bad credits are nothing new, but dealers unanimously agree the market has become more reactive to disappointing news, with players racing to unload paper as soon as a company issues a quarterly report or a rumor hits the market. "That's the difference," one trader said. "People are willing to sell on the news."

Bankers last week were saying agents on Nextel Partners' $600 million credit would likely have to increase pricing, but the company says it will pull the deal from the market if presented with an increase. At press time last Friday no new pricing structure had been arranged, but some bankers said one was needed to compete with other telecom deals and mollify lenders concerned that Nextel's parent, Nextel Communications, reported last week that it is expecting first quarter results to be hurt by the slowing economy. ButAlice Kang, director of investor relations at Nextel Partners, said if banks pressure the company on the pricing front the company will not do the deal. "When we negoitated the terms we were firm on pricing and if we can't seem to get the facility done at the current price, then we won't do it at all," she said.

Democrat John Hawke's chances of remaining comptroller of the currency under a Republican White House may have improved--at least in the short run, said banking industry sources rooting for him to be kept on. Hawke, like other heads of sub-agencies under the Treasury Department, has had a one-on-one meeting with new GOP Secretary Paul O'Neill and outsiders are counting on that session to have worked in Hawke's favor. Before this Feb. 23 encounter Hawke and other O'Neill subordinates met with the secretary as a group. An OCC spokesman confirmed the meetings occurred.

A $22.4 million piece of Owens-Corning's bank debt was auctioned off between 51 and 52 early last week, as selling pressure pushed the paper down a few points. The buyer and seller couldn't be determined by press time. While one dealer said the credit was higher relative to where other paper has been trading, another was surprised at the levels. "This thing had been in the 30s, so it sounds like a decent bump up to me," he said, attributing overall higher levels to more distressed buyers coming into the market. "People have struggled to put a box around liability, and they're getting comfortable with the underlying business." Owens-Corning, based in Toledo, Ohio, is one of the world's largest fiberglass manufacturers.

Southern Power, the newly launched non-regulated generation subsidiary of Southern Co., is seeking to round up $1.5 billion in the form of a non-recourse bank deal to back expansion, according to Chris Kysar, director of capital markets and leasing at Southern Co. Kysar told Power Finance & Risk, an LMW sister publication, that Southern Power plans to build plants in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee.

Michael Salshutz, a former Institutional Investor-ranked second-team analyst in the chemical industry with Credit Suisse First Boston, has joined Deutsche Bank Securities in the same capacity, according to a senior junk official at Deutsche Bank. Salshutz, who had been with CSFB for several years prior to its recent merger with Donaldson, Lufkin & Jenrette, will report to high-yield research co-heads David Bitterman and Andrew Van Houten and be based in New York.

Houston-based Greka Energy Corp. increased its five-year credit facility with GMAC and completed a new revolving credit line with Bank of Texas to replace an existing credit line the company had with Canadian Imperial Bank of Commerce. Jim Blackman, director of investor relations, said the company opted for a facility with Bank of Texas rather than refinance with CIBC because the new bank was willing to increase the facility level from $7 million to $16 million and provide less restrictive covenants allowing the company to pursue an acquisition plan this year. "We needed more money to make strategic acquisitions," said Blackman, explaining that the company is eyeing properties in Louisiana for future drilling opportunities. "Bank of Texas is also willing to provide more funding if we prove up the reserves," he added.