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Merganser Capital Management in Boston, which has historically been overweight the broker-dealer sector, has cut its holdings from 15-20% of the portfolio to 5%, selling $350 million worth of the bonds, which it views as too rich. The Morgan Stanley Dean Witter two-year medium term notes issued two weeks ago came at 80 basis points off the curve, compared with comparable finance sector or bank paper that is generally priced about 100-120 basis points off, notes Bob LeLacheur, who manages over $2.8 billion for the firm. He adds that five years ago MSDW paper would have traded 50-100 basis points cheaper to any bank. As the equity market began penalizing broker dealers with poor P/E ratios, they got rid of risk, and following recent mergers become market favorites.

Pitcairn Trust is in the process of executing a swap out of ABS and agencies and into investment-grade corporates on a credit-by-credit basis, to capture additional spread. Patrick Kennedy, portfolio manager for $200 million in taxable fixed-income, expects another strong year out of ABS and agencies, but believes he can pick up extra spread by swapping into corporates whose spreads he expects to tighten.

Rob Richards, a corporate bond trading veteran, has joined Scotia Capital in New York, where he will be responsible for trading Scotia-led issues in the secondary market. Frank Pinon, head of U.S. funding and debt trading, says Richards, who had also traded secondary issues at Donaldson, Lufkin & Jenrette and, most recently, CIBC World Markets, is part of an effort at Scotia to beef up its trading and origination of corporate bonds. As part of this focus, which is designed to leverage off its parent's existing corporate lending relationships throughout North America, Scotia will also be looking to add corporate bond analysts and sales staff in the near future.

Universal Compression has handed mandates to four banks to lead $852 million in structured facilities to back the company's acquisition of Weatherford Global Gas Compression. First Union, Deutsche Bank, Bank of Nova Scotia and BANK ONE were tapped based on the structures they pitched to the company, bankers said. ABN-Amro, seen as a top candidate for a lead role in the early going, did not make the cut. An ABN official declined to comment on the selection process or whether the bank would participate in the deal at another level.Richard Fitzgerald, senior v.p. and cfo in Houston, did not return repeated calls.

Levels for Wyndham International's term loan "B" moved up last week, as dealers noted a trade at 981Ž 4 and offers at 983Ž 4. Some payers attributed the move to a lingering rumor of a bond deal for the company, but others waved that off, pointing more to the credit's value relative to other paper in the market. "It's not a bad credit," one trader said. "Not a telecom name, better for people who are more risk averse." A market watcher commented on the overall strength of the market affecting the name. "The company is doing well. They have great cash flow, and the high-yield market is up," he said.

Canary Wharf Group Plc, the London-based office space construction company, recently inked a £1 billion credit to bulk up for GBP 4.1 billion in capital expenditures. Peter Anderson, managing director of finance, said the company needed to raise capital to fund costs associated with the building of office space in London. The office space is positioned as an alternative to the overcrowded London financial district.

Credit Suisse First Boston and J.P. Morgan Chase are preparing to bring to market a $250 million loan backing the acquisition of AMI Semiconductor, formerly American Microsystems (AMI), according to officials familiar with the matter. Citicorp Venture Partners and Francisco Partners, both private equity firms, are leading the buyout. The loan is structured as a $75 million revolver and a $175 million term loan "B." Pricing on the revolver is 3% over LIBOR, while the "B" tranche's spread is 31/2 % over LIBOR. Further credit details could not be ascertained. CSFB is administrative agent and Morgan Chase is syndication agent. Company and bank officials did not return phone calls. Officials at Francisco Partners declined to comment. The firms announced a definitive agreement to acquire nearly 80% of the company last December, which was valued just over $525 million. GA-TEK, a Japanese subsidiary of Energy Corp., will retain the remaining 20% and will also be granted a warrant to purchase an additional 10%.

Deutsche Bank is in the market with a $50 million add-on backing Trend Technologies' acquisition of Cowden International, according to a banker familiar with the transaction. The add-on will be tacked onto a $100 million term loan "B" that was part of a $175 million deal backing Doughty Hanson & Co.'s majority stake purchase of Trend Technologies. The bank is out to a handful of lenders, offering banks and institutional investors up-front fees of 5/8% on commitments to the "B" tranche, as well as 1% if they buy a piece of the pro rata. The official said Deustche Bank is most likely seeking minimum commitments of $10 million, but might settle for as little as $5 million. One existing lender is willing to underwrite only $1 million, according to the banker. Pricing is 4% over LIBOR.

NRG Energy is looking for a $2 billion construction and acquisition revolver and will start taking pitches from banks early next month. Brian Bird, v.p. and treasurer, told Power Finance & Risk, an LMW sister publication, that the credit will be used primarily to boost the independent power producers' U.S. generating portfolio outside of California. The company's roster of lead banks includes J.P. Morgan Chase, Credit Suisse First Boston, ABN-Amro and Citibank.

Airborne, Inc. late last month closed a $200 million working capital revolver that offers the company a new funding strategy. Lanny Michael, cfo, explained that the facility, led by Wachovia Bank, is an accounts receivable-backed transaction. "The $200 million is specifically backed by a pool of receivables and we can borrow under it," he said. The facility has a three-year term. He said the company had never used this type of funding before but had been long considering it. "It's cost-competitive, and we can borrow under it like a commercial A1/P1 commercial paper program," he said. "It's an attractive way to borrow for short-term financing, because there's a floating rate." Airborne is an overnight and two-day air express carrier based in Seattle.