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Standard & Poor's assigned Collins & Aikman Floorcoverings' (CAF) $256 million credit facility a BB-, citing the numerous improvements over the past few years, namely growth and leverage reduction. "Business has grown over the last three years," said Jayne Ross, analyst at S&P's. "They've generated higher sales. EBITDA margins are over 20%, and they've also reduced debt. In 1998, total debt to EBITDA was 4.2 times. At the end of last year, it was down to 3.7 times," explained Ross. She also noted that the company holds the number-one market position for the six-foot roll-carpet segment, a fast-growing niche market. The rating also takes into account CAF's diverse customer base, which tends to offset the cyclical nature of the carpet industry. "The company services the education, hospitality, retail and government markets," explained Ross. "The carpet industry is a cyclical market. When there is a downturn in the economy, clients may cut back on operating improvements and other areas. Usually government spending increases during an economic downturn." Ross said CAF's market segments have high renovation rates, which account for nearly 60% of sales, rather than new construction.

Large pieces of Federal-Mogul's "B" tranche traded several times last week, totaling $30 million and going as high as 65, dealers said. About two weeks ago, the company was tossed a lifeline by J.P. Morgan Chase, which threw in $550 million to help pay for asbestos liability claims. Market watchers are reserved on whether the money will help the company in the long run. "The outlook is not necessarily brighter," said a dealer. "Fed-Mogul needed money and time, and they got it from the banks because the debt was unsecured. Now it's on the backs of management to improve the margins in a bad market for cars. They have a very steep road ahead of them." A dealer involved in the trades believes the paper will continue to trade up. A spokeswoman for Morgan Chase declined to comment. A Federal-Mogul spokeswoman did not return calls. The additional money restructured the deal, which had been pari passu, and now puts the $550 million as number one, the pre-existing bank debt as two, and the bonds as three (LMW, 1/8). The deal was originally structured as a $400 million revolver, a $600 million term loan "A" and a $400 million "B" term loan.

Citigroup's $305 million credit for Alamosa PCS made its return trip to the loan market with a bank meeting last Friday, according to a banker familiar with the deal. Bank of Nova Scotia has signed on as senior managing agent, chipping in $50 million. Another bank is reportedly considering the same tier, but the name of the bank could not be confirmed. Up-front fees and commitment tiers could not be ascertained by press time. Company spokesmen for the telecommunications firm in Lubbock, Texas did not return calls. The credit backs Alamosa's acquisitions of Washington Oregon Wireless and Roberts Wireless Communications (LMW, 1/8). Toronto-Dominion Bank is co-lead and syndication agent. First Union is documentation agent and Export Development Corporation (EDC) is a fourth underwriter. Administrative agent Citi, syndication agent TD, First Union and EDC have all equally underwritten the loan.

There were two trades of The Finova Group's '01 paper early last week, with about $10 million changing hands at 74, dealers reported. It marks the third consecutive week of trading in the name, as market players found a bright note in the high-yield market to add to the list recent reasons to trade in the debt. A consultant's study four weeks ago prompted an uptick for Finova and investor confidence grew when Warren Buffet took an interest in the company's debt. A company spokesman did not return calls for comment. One trader said overall market confidence is now helping the name. "We're certainly seeing a minor rebirth of the high-yield bond market since last week or so," said a market watcher. "There's a sense of relief in the market, with the Federal Reserve's interest rate cut helping a huge amount. We're also seeing new money come into the market."

The name John Dugan, a partner in Covington & Burling, is being floated around Washington as a possible replacement for John Hawke, the present comptroller of the currency. A call to Dugan produced was not returned by press time. A Bush transition aide said, "We don't speculate about any rumors that are circulated about appointments." Dugan served on the Republican staff of the Senate Banking Committee and subsequently as an assistant secretary in the Treasury Department before going back to private law practice. According to one variation of the rumor, the Bush team has sounded Dugan out about a position at Treasury which it is said he does not want and the comptrollership about which he has expressed more interest.

Managing agents on CIBC World Markets' and Credit Suisse First Boston's $1.2 billion deal for SpectraSite Communications are wringing their hands and hoping a strong institutional showing will charge up a sluggish syndication. The co-leads have postponed selling the $850 million pro rata chunk and are out to institutional investors hoping that the $350 million "B" tranche will oversubscribe enough to downsize the pro rata. David Tomick, cfo of SpectraSite in Cary, N.C., did not return calls seeking comment. While some bankers are optimistic about the institutional market welcoming the credit, there are concerns about hold levels and credit quality. "It's a virtual certainty we're going to hold all [$50 million]," said one managing agent on the deal. "I didn't want to do a $50 million ticket. I thought it was stupid to do that size without leading the deal," said the banker. Another lender chimed in, "Credit quality is obviously on everyone's mind, but I would suspect, because of the industry and sector, ultimately these tower companies are stable, revenue-generating cash cows. It's a B+, but it will improve over time." Officials at CIBC and CSFB did not return calls.

Moody's Investors Service lowered the senior secured debt facility of IMC Global Inc. to Baa3 from Baa2 following the company's announcement that earnings for the fourth quarter will be substantially below anticipated levels. Citing further weakness in the market for phosphate fertilizers and higher raw material and energy prices, Moody's believes that IMC will be unable to reduce debt to levels which support the Baa2 ratings within the next 12 to 18 months. The rating also considers that the company will indefinitely close all phosphate fertilizer production at its Louisiana facilities. Moody's anticipates changing the outlook to stable once the bank group has finalized the amendment to the credit facility and the company has a more definitive indication of the timing of asset sales. The Lake Forest, Ill.-based company produces phosphate and potash fertilizers and animal feed ingredients. J. Bradford James, cfo, did not return calls for comment. Bank of America leads the company's $550 million bank deal, according to Capital DATA Loanware. • Moody's notched down the senior unsecured debt ratings of Caraustar Industries to Baa2 from Baa1, reflecting expectations that industry conditions for the company's core recycled paperboard products will remain relatively soft. Acquisitions and elevated capital spending have pushed debt higher over the past two years. This, combined with higher raw materials and costs and lower volumes have resulted in materially weaker debt protection measurements than previously anticipated. Along with ongoing cost improvement and the elimination of below market contracts at the Sprague mill, this should provide a modest boost to operating income and cash generation by the end of the year. Caraustar, headquartered in Austell, Ga., is one of the largest manufacturers of recycled paperboard in the country. A company spokeswoman did not return calls for comment. BT Alex. Brown NationsBank and SunTrust Bank are the mandated arrangers to the company's $400 million bank facility.

Pennsylvania Real Estate Investment Trust has tapped Wells Fargo Bank to provide a $175 million revolver and a $75 million construction loan, replacing a $150 million revolver that was provided by First Union. Edward Glickman, executive v.p. and cfo, said the REIT chose this structure for the $250 million credit so it could coordinate its construction financing with its credit line, a strategy that ran afoul of the covenants on its previous facility. The REIT will now use the revolver for the preconstruction costs of a development and the construction loan for the construction phase: it then will transfer the property back to the revolver. Wells Fargo got the nod because it offered the best pricing. The three-year revolver is priced at LIBOR plus 1.3-1.8% and the two-year construction loan is priced at LIBOR plus 195 basis points. FleetBoston Financial, Summit Bank, First Trust and Wilmington Trust-four banks that were part of its original bank group- also participated in the syndicate. During the construction facility's two-year term, the REIT can borrow up to $75 million for new projects. Each borrowing will be accounted for as a separate construction loan and will have a two-year maturity.

Allied Waste is rumored to be considering a $1 billion bond deal that would pay down as much as 30% of its outstanding tranches, and bank debt players late last week started pushing up the price on the debt. The paydown is expected at par, and trade levels have been creeping up to that level on the bond rumor. A $5 million piece traded at 97 5/8 early last week, and some traders were talking the debt up to 98, but nothing could be confirmed as moving at that level by press time. A company spokesman for the Scottdale, Ariz.-based company did not return calls for comment by press time. Word of the bond deal was spreading late Thursday. "It hasn't been announced, but we're hearing it could happen very quickly," one trader said, noting that he heard there will be a 22-25% pay down on the "A," "B," and "C" tranches. He added, however, that a bond deal is hardly a no-brainer. "We're still trying to figure out why they're doing it. They don't need it; they're playing with liquidity. Why would you replace lower priced bank debt with higher priced bonds?" Whether the deal comes off as rumored made little difference last week for the bank debt, which moved up.

VoiceStream's "A" tranche may be feeling the squeeze under the weight of the $4 billion Deutsche Telekom invested in it, pushing down debt and the level on the pricing grid, dealers said. Last week $5 million of the "A" tranche traded at 973/4, and dealers noted that price is off about 11/4 from two months ago. Calls to the Bellevue, Wash.-based company were not returned. One dealer said a lack of buyers for telecom paper may be the cause, but a drop on the pricing grid would not help. "The A's are under pressure. The new money from Deutsche lowers the debt-to-cash flow. Prices are done on a grid for the "A" and are based on debt versus cash flow. By getting more money in, the debt level lowers," he said. Late last year VoiceStream's levels slid to 981/2 from 991/4 down from near par (LMW, 12/25). Dealers cited skepticism over the Deutsche Telekom deal, sparked in large part over that company's falling stocks. The $3.25 billion Voicestream facility breaks down into a $1.35 billion revolver, and a $900 million term loan "A" a $1 billion term loan "B." Goldman Sachs leads the deal. A bank spokesman did not return calls seeking comment.

Leading Australian investment banks have been busy submitting their final bids for a lead advisory role in the planned A$4bn Sydney Airport initial public offering. Bankers say winning bidders will be mandated initially for a "scoping" report that will advise an IPO, a private sale or, as has become more common, a combination of the two involving a strategic cornerstone investor. Among the leading contenders are privatisation advisers such as ABN Amro, Credit Suisse First Boston, Deutsche Bank, Macquarie Bank, Merrill Lynch and UBS Warburg.