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Bankers said pricing on the Fairpoint Communications deal has risen 50 basis points on both the "B" and "C" tranches to attract players as Deutsche Bank and Bank of America have been struggling to get the credit through syndication. Market chatter is that the $150 million add-on deal is not getting a lot of attention as more attractive deals for Williams Communications and Level 3 Communications are rumored to be having syndication trouble of their own in the face of a recent flood of telecom deals. Calls to banks and the company were not returned by press time.

First Union is in the market with a $200 million credit facility for Dairy Farmers of America, Inc. The 364-day facility replaces the company's existing $175 million, 364-day credit. In addition to the 364-day, the company will amend its $175 million, three-year revolver. Jerry Boss, cfo, said the company needed to increase the credit by $25 million for use as a commercial paper backstop and for other general corporate purposes. "We wanted to add more liquidity," said Boss.

The pro rata piece of Merrill Lynch's $900 million credit backing industrial packager Grief Brother's acquisition of Huhtamaki Van Leer traded up after the deal closed recently, providing a glimmer of hope for credits in what has been a brutal pro rata market. "The pro rata traded inside the fees," said a participant banker, noting that the deal carried commitment fees of 5/8% and 1/2% on commitments of $25 million and $15 million, respectively. The credit's $400 million term "B" blew out quickly after the February launch as 60 accounts clamored to get a piece of the BB/Ba3 credit, which traded around 1001/2 after close.

Sole underwriter J.P. Morgan Chase held a bank meeting last Thursday to launch syndication of a $1.05 billion deal for Alliant Techsystems. The credit comprises a six-year, $250 million revolving credit and a six-year, $300 million term loan "A," both priced at LIBOR plus 23/4 %, and an eight-year, $500 million term loan "B" priced at LIBOR plus 31/4 %. Alliant Techsystems is a Hopkins, Minn.-based producer of gun powder, smart bombs, and rocket propulsion systems.

J.P. Morgan Chase is in the market with a $105 million credit for food and beverage company Mafco Worldwide Corp. for acquisition financing. Todd Slotkin, cfo, declined to comment on details regarding the facility and acquisition plans. Credit Suisse First Boston will act as administrative agent and BNP Paribas has signed on as documentation agent. The deal comprises a $15 million revolving credit and a $90 million term loan "B," both priced at LIBOR plus 31/2 %.

A $1.3 billion asset sale has reportedly pushed up levels for J.C. Penney Funding Corp.'s bank debt to the mid-90s in two trades last week, dealers said. It could not be determined by how much levels have risen. "Buyers like the liquidity of the company, while sellers are getting out of the retail name," a trader noted. The company is selling its direct marketing business to Aegon, a Dutch insurance company. J.C. Penney, based in Plano, Texas, is in the retail and distribution business.

Market players are eagerly awaiting this week's launch of the Credit Suisse First Boston- and Morgan Stanley Dean Witter-led $820 million credit backing the leveraged buyout of energy equipment provider Dresser Equipment, sponsored by Odyssey Partners and First Reserve Corp. "This will definitely blow out," said one banker who has seen the deal, pointing to the $455 million term "B" as a tranche institutional buyers will be jumping on. Bankers said the scarcity of well-structured, strong credits bodes well for Dresser. "It's expected to rate BB- and it's an industrial. This thing is right in the zone," said another banker. Market sources said Dresser will quickly avert attention away from telecom credits as the market has become more bullish on the energy sector.

A $5 million piece of Emmis Communications' bank debt traded up this week to par on the heels of the company's announcement that it will come to market with a $200 million bond deal. Dealers attributed the trade to the bond deal, which would be subordinate to the bank debt and make paper more attractive. Dealers observed initial appetite for the paper early last week following the announcement. "The paper should trade up. We have seen a few retailers sniffing on it today," a trader observed. Another market player predicts the paper will trade up to the 100 3/8 range. "There has been some weakness in the company," he said, giving his take on why the bond deal was done. He noted that the company will make only $160 million in proceeds from the bond deal. Still, another market player says Emmis is still viewed as a strong credit. "Clearly, most investors are watching the fundamentals in the broadcasting industry closely, but most feel that the loan offers good value at par," he said.

The $175 billion California Public Employees Retirement System, is considering a dedicated allocation to domestic junk bonds, and could begin searching for as many as five high-yield bond managers to handle an initial $1 billion. According to market sources, this is the first time in nearly a decade that the West Coast behemoth is entering the junk market. Curtis Ishii, investment officer for global fixed-income, says the fund's investment officials have drawn up a recommendation to begin searching for junk bond managers, and sent it to the plan's board for approval at its meeting today.

Argosy Gaming Company amended and closed a $400 million credit facility this month to fund the buyout of total shares of Argosy Casino and Hotel. This replaces a $200 million facility that provided options to draw an additional $225 million. "Now we can draw on $400 million without contingencies, versus our old facility in which we could draw additional money only if we were acquiring 42% of all minority shares," said G. Dan Marshall, v.p. and treasurer of Argosy Gaming. He explained that the limited partners had an exit strategy that allowed them to sell of their shares to the main shareholder, Argosy Gaming. It paid the purchase price of $105 million for the minority interest from Centaur, Inc. Argosy Gaming used its original facility to fund the buyout of Conseco's $260 million in shares. Conseco sold them off in part to fund a $2 billion reduction in bank and public debt. Argosy Gaming, based in Alton, Ill., is a river boat casino operator on the Ohio, Mississippi, and Missouri rivers.

FleetBoston Financial is in the market with a deal for Crescent Real Estate Equities that is testing a new benchmark for real estate investment trust credits, bankers said. The Fort Worth, Texas, REIT is looking to refinance its $850 million credit facility, which is provided by UBS Warburg and Fleet and is priced at LIBOR plus 2 3/4%. The approximately $400 million refinancing--which is being shopped at LIBOR plus 1 3/4%--also will eliminate the mortgage security interest offered to lenders, thereby converting the facility to an unsecured deal.

Packaging products company Crown, Cork, & Seal extended the maturity of its existing $2.5 billion facility and secured an additional $400 million term loan in the wake of decreased credit ratings related to the company's asbestos exposure. Timothy Donahue, senior v.p. of finance, said he believed that overall the deal was a success despite some delays by participants related to the company's well-publicized asbestos exposure. "Some formerly supportive banks became unsupportive and then supportive again," said Donahue who declined to name banks or provide specifics related to syndication.