Securitization People and Markets

Larry McCarthy will join Lehman Brothers today as managing director and head of distressed trading. He reports to Alex Kirk, head of high yield, according to a Lehman high-yield official with knowledge of the situation. McCarthy had been trying to negotiate the move for over a month (BW, 2/3). Neither he nor Kirk returned calls. It could not be determined who, if anyone, McCarthy is replacing.

Morgan Stanley has made two senior hires as part of an effort to grow its high-yield business in response to the recent growth of that market, says Mitch Petrick, co-head of the firm's global high-yield and loan products group.

Credit Suisse First Boston and Deutsche Bank shifted $65 million from AmeriPath's "B" piece to an upsized $275 million bond deal last week. Pricing was also boosted with the $225 million institutional loan increasing from LIBOR plus 33/4-41/ 2% with an original issue discount of 99. The revolver was shaved down $10 million to $65 million and maintains a spread of 31/2% over LIBOR. The now $290 million facility backs plans by Amy Acquisition Corp.-- a Welsh, Carson, Anderson & Stowe company-- to acquire the cancer diagnostics provider. An AmeriPath spokeswoman, a Welsh Carson official and a Deutsche Bank banker did not return calls. A CSFB official declined to comment.

The $470 million refinancing credit for KinderCare Learning Centers was yanked from the market last week as the company and equity sponsor Kohlberg Kravis Roberts & Co. balked at proposed changes to the deal. "The reason we backed off on the credit facility was that the terms were not acceptable to the company," said Dan Jackson, cfo. He declined to discuss particulars, but KKR's reluctance to offer more than stock as security is believed to be the major sticking point. The company will instead go for a commercial mortgage backed securities deal. Officials at J.P. Morgan and Citibank, the leads on the bank deal, declined to comment. KKR officials declined to comment on the situation.

Bresnan Communications' $400 million credit backing the acquisition of subscribers from Comcast is on its way home as the cable sector finally seems to be coming back into favor with lenders as long as the price is right. The company weathered close to a year-long effort to finalize the entire transaction and ended up increasing its spread over LIBOR by 50 basis points and offering a steeper original issue discount. Margot Bright, v.p. of finance for Bresnan, said things are looking better for the sector. "The cable sector is looking quite good," she said, citing stronger free cash flow year-end reports from other companies in the industry. "The Charter [Communications] overhang is a little bit over," she said, adding that the Adelphia [Communications] shocks are also subsiding.

Credit Suisse First Boston and Scotia Capital are launching syndication of a $100 million add-on piece to Weight Watchers International's (WWI) existing credit for the company's acquisition of nine of WW Group's 15 franchises in the U.S. and Mexico. WW Group is the largest acquirer of WWI franchises. It operates and owns franchises that conduct Weight Watchers meetings in several U.S. states and parts of Mexico. Pricing on the six-year institutional loan is LIBOR plus 21/2% and the bank meeting is set for today.

J.P. Morgan and FleetBoston Financial completed a $250 million credit last week for National Mentor, flexing the pricing by 75 basis points in order to get the job done. The deal launched on Feb. 10, but struggled through syndication, as concerns about the company's dependence on state and federal funding kept investors back (LMW, 3/10).

UBS Warburg, Goldman Sachs and CIT Group are set to lead International Steel Group's (ISG) $1 billion bank deal backing its $1.5 billion acquisition of Bethlehem Steel. The asset-based credit includes a $400 million "B" piece, a $300 million "A" loan and a $300 million revolver, according to a banker familiar with the deal. He said pricing on the "B" will fall in the range of LIBOR plus 31/4-33/ 4%, while the pro rata should price between LIBOR plus 23/4% and 31/4%. Final ratings, expected between B and BB, will determine the exact pricing, he added. The deal should launch at the end of March or early April, the banker noted. A UBS official declined to comment, while Goldman and CIT bankers did not return calls.

The Goodyear Tire & Rubber Co.'s new $1.3 billion credit will not carry the restrictive assignment language that has caused problems with the company's existing credit. Goodyear's ability to nix trades in the secondary loan market had lenders concerned about liquidity (LMW, 2/17). But lenders are applying some leverage with the company back in the market, hat in hand. One buysider noted that Goodyear changed its tune because "it needs us now." Keith Price, Goodyear's spokesman, declined to comment on the change in stance on trade approvals.