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A $10 million piece of Harnischfeger Industries' bank debt traded up slightly last week at 42 due to the company's restructuring and rumored escape from Chapter 11 bankruptcy. "They're coming out of bankruptcy in the next couple of months," one trader said. Another discounted that reasoning. "Everybody's known that for a while," he said. "They're trying to restructure, and they did well on their numbers." Calls to the Milwaukee, Wis.-based company were not returned.

As the field of pro rata lenders thins, investment banks are resisting the pressure from borrowers to step up and fill the void, according to Corporate Financing Week, an LMW sister publication. Some investment firms would participate in commercial programs to maintain a relationship with a particular client, said Art Penn, managing director, head of global leveraged finance at UBS Warburg. However, consolidation has resulted in fewer players in the market and investment firms are not as concerned about being cut out of later deals if they decline to participate in a commercial facility.

J.P. Morgan Chase has launched syndication of a $400 million, two-year revolving credit for The Great Atlantic & Pacific Tea Company. The facility, priced at LIBOR plus 21/2%, will replace an existing $500 million, five-year facility also led by Chase Manhattan Bank. Officials at A&P declined to comment on banking arrangements. Calls to the banks were not returned by press time. A Chase spokeswoman declined to comment.

Houston-based Service Corporation International last week tapped J.P. Morgan Chase to lead a $200 million revolving credit facility for the company. Jeffrey Curtis, cfo, said the company is looking to close the single-tranche credit by the end of this month and indications thus far show that pricing is expected at LIBOR plus 3%. He declined to name other banks participating on the loan. "We are shooting for $200 million but we would settle for less or accept more," he said. Curtis declined to elaborate on whether or not he expects the credit to be oversubscribed. J.P. Morgan Chase did not return calls.

Levis Strauss signed a $1.05 billion credit facility two weeks ago and issued roughly $500 million in notes to replace the company's existing $1.6 billion facility. Eileen Van Ess, assistant treasurer, explained that the company planned to replace the $1.6 billion facility with a $1.5 billion loan, but then decided to further reduce the facility to $1.05 billion and issue roughly $500 million of notes in the bond market to diversify the company's debt.

Medford, Ore-based Lithia Motors, Inc. added $130 million to its existing credit facility with Ford Motor Credit, bumping up the total credit to $580 million. Bryan DeBoer, senior v.p., said the total revolving credit facility comprises tranches of $250 million, $150 million, $130 million, and $50 million. He declined to provide pricing on the facility. DeBoer said the company has a long-standing relationship with Ford Motor Credit as the lender specializes in providing facilities to auto retailers.

An estimated $70 million of Mariner Post Acute Network's bank debt traded between 46 and 47 last week, with dealers continuing to cite a strengthening health care industry as well as an improved distressed market overall. "It's up a couple points; people feel more bullish on the health care sector," said one. Another dealer noted that from a low point two years ago, there was only one direction for the industry to go in. "As with all health care stuff, it had bottomed out," he said. Calls to the Atlanta, Ga.-based company were not returned.

Institutional players are reportedly eating up last week's launch of Credit Suisse First Boston and Deutsche Bank's $775 million loan backing AEA Investors and DLJ Merchant Banking's leveraged buyout of B.F. Goodrich's chemical business, Performance Materials. One banker added that bankers expect the deal to be oversubscribed as a conservative structure has made the institutional tranches very appealing to the market.

• Moody's Investors Service downgraded Generac Portable Products' $115 million in secured credit facilities to B3 from B1 because of the company's weak performance last year due to reduced demand for generators. This is due to record demand in 1999, caused by severe weather activity in addition to consumer concerns about possible Y2K power outages and higher-than-normal generator inventory levels at retail locations in 2000. Because Generac was operating under tight credit measurements as a result of its 1998 recapitalization, there was little cushion to absorb lower results. Regarding 2001 projections, generator sales are expected to improve now that a good portion of 2000 excess inventory has been worked down.

Pricing and structure details emerged last week on Goldman Sachs' $205 million credit for Granite Broadcasting. The deal comprises a $110 million term loan "A" tranche and a $95 million "B" tranche. Both pieces are priced at LIBOR plus 51⁄2%, but there is a 12% floor on the deal, a banker said. The floor puts the deal above the 51⁄2% over LIBOR. Goldman expects it to close syndication by the end of the month but is still waiting for other players to come in on the deal.

Rite-Aid Corp.'s announcement last Tuesday that it would offer to exchange $321.6 million in bonds for stock sparked a trade of the Rite Aid.Com credit in the 80 range. Dealers reported a second trade on Wednesday between 86 and 87, with upwards of $50 million trading in the two days. One trader said the levels had softened after hitting a high of 86. "Doing the exchange with the convertibles takes a lot of liquidity pressure off the company," he said. The national drugstore chain is based in Camp Hill, Pa. It merged with Drugstore.Com to provide online pharmacy information and services. A spokeswoman declined to comment on trading levels.