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The market pounding telecom companies have taken over the past two weeks conjured up some not so fond memories. One dealer recalled the stock market crash of 1987 and looking out of his Boston office and into the 35th floor of the Fidelity Investments building in Boston. "It was a very sobering day," he said. "I could see people lining up to redeem their mutual funds." Another just remembers being in the office and swearing a lot.

Bank meetings will be held this week in New York and Chicago for a $625 million credit for Toledo, Ohio-based Libbey. Ken Wilkes, v.p., cfo for the glass tableware manufacturer, said the loan will fund the acquisition of the Anchor Hocking consumer and specialty glass business of Newell Rubbermaid and refinance Libbey's existing debt. Leads Bank of America, Bank One and Bear Stearns will hold meetings in New York tomorrow and Thursday in Chicago.

Barclays Capital has hired Ralph Marinaccio to the new position of director, investment-grade trading. Marinaccio will focus on utilities trading, reporting to Rich Roche, director and head of investment-grade trading. Roche says he hired Marinaccio to increase the firm's commitment to investment-grade as a whole, and particularly the utilities sector, which has been hot of late. Barclays has slowly been beefing up its investment-grade sales and trading, consistent with its push to become a major U.S. fixed-income player (BW, 6/18). The firm hired Roche roughly two months ago and trader Rich Wolfe shortly afterward. John Stathis, head of global market sales and research, says no further sales or trading hires are imminent, however.

Buysiders last week were looking at deals for Interstate Bakeries and Cott Corporation and agree that the LIBOR plus 2 1/4 % pricing on the "B" tranche of the Interestate Bakeries deal marks the most aggressive pricing to date for food sector deals. Institutions have been clamoring to get allocations in the defensive sector and the demand is starting to show in pricing. "This is as low as we've seen it," said one buysider, noting that Interstate has revenue, branding and a Ba1 rating to pull off the thin pricing. Many commitments have reportedly already come in on the credit after the bank meeting.

Dresdner Kleinwort Wasserstein is reorganizing its U.S. credit business, according to Neil Neilinger, head of credit products at the firm. Neilinger says the firm plans to hire several more investment-grade traders in the third quarter, and has already begun interviewing people. He says the firm is focusing in particular on the industrial and telecom sectors. Neilinger describes Dresdner as "developing its credit business in emerging markets, high yield, and high grade," but would not elaborate further, and did not return repeated calls.

J.P. Morgan and Bank of America are in the market with a refinancing deal for medical-device maker Boston Scientific Corporation that pushes out the maturity on the company's loans. The company is converting its one-year, $600 million revolver and pushing it into a five-year deal, while the existing $1 billion five-year, maturing in 2002, will be left to expire, said Milan Kofol, v.p., treasurer.

Fiduciary Trust Company International, a New York City-based portfolio management firm with some $18 billion in taxable fixed-income, is considering an expansion into select high-yield and/or telecom credits, says Stuart Hochberger, executive v.p. and head of fixed-income. The possible move into telecom is in marked contrast to other investors who have been reducing exposure to the sector. Hochberger is pondering this foray because he says telecom has been beaten up badly in recent trading. He says some combination of better prospective profits, combined with additional Fed easing or better growth throughout the economy, might convince the firm to add 3% to high yield, possibly selling investment-grade financials such as the Citigroup (Aa2/AA-) 7.25% of '10. He says that specific credits he is considering for purchase include Global Crossing (Ba2/BB), France Telecom (A3/A-) and Deutsche Telekom (A3/A-), but would not speculate on a timetable for execution.

Credit Suisse First Boston and J.P. Morgan Chase are preparing a $2 billion, 364-day loan for Nortel Networks Corporation. Earlier this month the Canadian networking group said it would post a $19.2 billion second quarter loss in response to weaker than expected sales of telecommunications equipment. Officials at Nortel did not return calls.

Morgan Stanley and Bank of America are trying to drum up interest in PacifiCare Health Systems' $500 million bank deal by pre-marketing the credit to institutional investors in one-to-one meetings before general syndication begins this week. Buysiders have been cool to the credit and say it could test the market's appetite for HMO deals in the hot health-care sector. "This will be a tough deal to get done," said one buysider, explaining that PacifiCare is not only part of the still shaky HMO segment of the market but an HMO with large exposure costs associated with its senior citizens-focused business. Bankers and buysiders noted that Morgan Stanley and B of A have been meeting with investors individually to lure larger institutions into the deal in effort to secure big commitments.

The market, hungry for a solid credit, is awaiting Suiza Foods' break into the secondary market. The deal is still waiting for final documentation to be completed, but it has been touted as one of the strongest deals of the year as the "B" tranche was well oversubscribed by investors. "It will trade well over par," one trader predicted. Yet a few dealers are cautiously optimistic about levels and they expect the term loan to trade higher than the pro rata. "The pro rata struggled more in syndications," a trader noted, adding that appetite for pro rata deals isn't as strong.

After slowing the previous week, the primary market turned hostile last week, with just $12.3 billion in paper priced. Better quality credits stuck to the short-end of the curve, issuing paper 5 years and in. Credits with any noise around their stories had a tougher go of it. Eastman Kodak, for example, postponed a 5Y deal when one of its key customers filed for bankruptcy protection. A2/A+ Kodak was talked in the +160 bp area before the deal was postponed; it came the next day at +175 bp, wide to most single-A paper including European Telecom paper. Despite the increased scrutiny each deal came under, there was still a relatively robust junk calendar, with $3.6 billion of below investment-grade paper done. The average deal size for the week was $275 million, the lowest recorded level for 2001. Average ratings were still around the A- level although on a duration-weighted basis credit quality was much lower. The primary market should remain slower this week as participants look ahead to the June 27 FOMC meeting.