High Yield Report articles from March 2004

High Yield Report archives from March 2004

Us Company News.
March 1, 2004... Much of the expected round of musical chairs in the high yield bond markets this year has occurred not at the bulge-bracket level, but among the boutiques specializing in junk. These smaller firms are raiding their rivals for top personnel...

US/Europe.
March 1, 2004... Sourcing high yield deals hasn't been much of a problem for Deutsche Bank, whose market share has placed it among the top three underwriters of global high yield debt for the past three years, according to Thomson Financial. But recently the...

Restructuring.
March 1, 2004... Bankrupt cable television giant Adelphia Communications Corp. might see its long-awaited reorganization plan scuttled next month as stockholders ramp up legal efforts to have the company liquidated. The nation's fifth-largest cable operator...

The Word Is.
March 1, 2004... It's usually about this time of year when the number of financial market professionals shifting jobs picks up pace. Bonus season means that many bankers are free to move on, and for those unhappy with their compensation, it is the ideal time to...

Ratings.
March 1, 2004... Rating agencies rallied behind Herbalife International Inc.'s multi-million dollar recapitalization plan last week by pledging increased protection measures and strong credit ratio numbers on its debt. The Los Angeles-based vitamin...

US Company News.
March 1, 2004... Loan market players were stunned last week over the collapse of Calpine Generating Company's (CalGen) $2.3 billion financing deal. Most were left wondering what the power company's next step would be to refinance its $2.5 billion revolver...

Europe.
March 1, 2004... In what has been seen by some as a litmus test for the European high yield market, Invensys, a global electronics and engineering company, was gearing up a GBP650 million equivalent high yield notes transaction last Friday. The deal is one of...

Market Buzz.
March 1, 2004... In a move designed to advance Deutsche Bank's loan business capabilities, the bank has appointed Michael Paasche as the head of loan products. In the newly created position, located within the firm's global corporate finance division, Paasche...

AMG Data's Weekly HY Fund Flows.
March 1, 2004... As many had anticipated, AMG Data reported $392.15 million in outflows from high yield funds in the week ending February 25. It is the third week of outflows of the past four weeks - last week AMG reported that $227.38 million flowed into...

Last Week's Top Gainers & Losers: Lucent/Dobson.
March 1, 2004... Lucent Technologies saw its high yield securities move higher again last week as investors continued to cheer on a resurgence in technology sector heavyweights. The New Jersey-based company swung into a profit during last month's second...

Credit.
March 8, 2004... The number of first-time issuers tapping the high yield market was on the upswing in 2003, and analysts believe the trend will continue as more companies take advantage of a booming environment to slash debt burdens and raise capital. ...

US Company News.
March 8, 2004... YUM! Brands Inc., the parent company of KFC, Pizza Hut, Taco Bell and other restaurant chains, hopes to become the first major company to shed the junk label this year, in what is shaping up to be a border rush into high grade. Merrill...

Sector Analysis.
March 8, 2004... Lost in the hullabaloo over speculative-grade energy companies flirting with default, as evidenced last week with the recent collapse of Calpine Corp.'s $2.3 billion bond and loan financing, is the growing number of energy companies on the...

The Word Is.
March 8, 2004... Everyone loves a positive news story. As the US economic recovery advances, credit-positive events should become increasingly frequent. For one group of credits, rising stars, the trend of steadily improving credit quality can only mean one...

Market View.
March 8, 2004... Investors tied to collateralized debt obligations might see less bad news this year from what has been considered to be among the worst performing sectors of the structured finance market in recent years - collateralized bond obligations...

CDOs.
March 8, 2004... Middle-market collateralized loan obligations (CLOs) are becoming ever more prominent within the US CDO market. Indeed analysts predict that the growth of new sectors such as middle-market CLOs and high yield CLOs will help sustain the US CDO...

Profile.
March 8, 2004... Business is booming at Wachovia Securities. The Charlotte, N.C.-based diversified financial services firm has not only established 27 brand new client relationships so far this year alone, but it has acted as leading bookrunner on all of these...

Market Buzz.
March 8, 2004... Kevin King resigned from his position as European high yield salesperson at Deutsche Bank at the end of February. He has returned to the US and taken a position at Lehman Brothers. King, whose first position in London was as a high yield trader...

Market Buzz.
March 8, 2004... If you haven't already, now might be the time to switch to an active strategy when it comes to managing fixed income funds in the US. At least, that's what David Rolley, vice president and portfolio manager for Loomis Sayles & Company LP,...

Last Week's Top Gainers & Losers: Goodyear/Bally.
March 8, 2004... Goodyear Tire & Rubber Co. saw its high yield debt spin higher last week after the Ohio-based company secured a much sought-after financing deal and settled a labor dispute with its largest union. The world's largest tire company reached...

Sealy In $1.5 Billion Buyout By KKR.
March 8, 2004... Kohlberg Kravis Roberts & Co., the world's biggest buyout firm, agreed last week to buy mattress giant Sealy Corp. from Boston-based investment firm Bain Capital in a deal valued at $1.5 billion. Goldman Sachs, which coordinated the sale for...

AMG Data's Weekly HY Fund Flows.
March 8, 2004... Reversing a three-week trend, AMG reported $135 million of inflows into high yield mutual funds in the week ending March 3. This brings the year-to-date cumulative outflows down to $1.262 billion, according to AMG. The turnaround comes...

Sector Analysis.
March 15, 2004... With investors clamoring for gaming debt, and few issuers in need of cash, underwriters are scrapping over the tiniest issue. Witness the subtle change of lead bookrunner on MGM Mirage's $300 million add-on this week. Banc of America and...

US/Europe.
March 15, 2004... In the past month, the game of high yield musical chairs has accelerated on both sides of the Atlantic, but headhunters covering the market say that is just a prelude: Expect an avalanche of people moves in April and May, they say. What is...

US Company News.
March 15, 2004... Standard Commercial, one of the world's largest leaf tobacco dealers, kicked off roadshows in London last week to promote a $300 million refinancing deal that will be used to redeem debt and pay back an existing revolving credit facility. ...

The Word Is...
March 15, 2004... For the most part, mezzanine is viewed as an alternative source of funding for companies - predominantly middle market - unable to tap the high yield bond or loan markets. It is also frequently used in debt-in-possession and exit financings....

Sector Analysis.(high yield bond market)
March 15, 2004... Investing genius, chairman of Berkshire Hathaway Inc. and now the second-richest man on earth, Warren Buffett, won't be looking for any more bargains in the high yield bond market this year. What's more, he is betting the $8 billion pumped into...

Mezzanine.
March 15, 2004... US mezzanine investors looking for new opportunities could do worse than follow the lead of GSC Partners, and look to European mezzanine. Speaking at the IIR's 5th Annual Mezzanine Finance Forum, GSC's co-president, Keith Abell, explained why...

Profile.
March 15, 2004... This year, Sumitomo Trust's New York-based leveraged loan business (The STB Loan Fund) is looking to invest in a more broad-based, aggressive manner. There is little alternative but to proceed this way, says Suraj Bhatia, executive vice...

Market Buzz.
March 15, 2004... The leveraged finance team at Merrill Lynch is now in the midst of a restructuring designed to help lure in bigger deals and help the Wall Street giant catch up to competitors in leveraged lending. Todd Kaplan, who was named head of the...

CalGen Resurfaces.(Calpine Generating Co.'s refinancing deals)(Brief Article)
March 15, 2004... Calpine Generating Co. resurfaced with a new jumbo $2.405 billion deal to refinance its maturing debt despite management telling the market they would wait until June to come back with a revised debt deal (HYR, 3/1). The power company pulled a...

Europe's Trio of Deals.
March 15, 2004... Three European deals are expected to kick off roadshows this week, with UK cable giant NTL leading the pack with a GBP800 million equivalent dual tranche and US dollar high yield offering, bankers said. Others include German defense company MTU...

US Company News.
March 15, 2004... The New Orleans Employees' Retirement System might soon replace Deutsche Bank as the manager of its high yield bond portfolio in a bid to increase stakes in that market and diversify the $380 million pension plan. Jerry Davis, the plan's...

Us Company News.
March 15, 2004... Sun Microsystems suffered a nasty shock last week as Standard and Poor's downgraded its credit rating two notches into the top speculative portion of high yield status. The downgrade to triple-B, which affects some $1.3 billion of public debt,...

Advantage Data.
March 15, 2004... Potlatch, the Washington-based paper company, saw a number of its high yield rated bond issues move higher last week, in what was a considerably robust trading period. The company, which has a mix of split-rated issues, is one of many...

Market View.
March 22, 2004... The high yield bond market in the next few weeks faces a critical turning point that could define the rest of the year's tone, as two opposing trends - a dwindling number of investors and an enormous near-record amount of new issues - are set...

US/Europe.
March 22, 2004... Historically, the US and European high yield markets have been highly correlated, but after enjoying a sustained run of positive returns, the US market posted a total return loss of -0.11%, its first negative return since July 2003. Meanwhile,...

Strategy.
March 22, 2004... Junk-rated issuers have found a new way to tempt investors into refinancing deals that otherwise might have fallen on deaf ears: capitalize on interest rate jitters by issuing floating-rate notes. The once-obscure funding vehicle is becoming...

The Word Is.
March 22, 2004... The Fed may have left rates on hold last week, but that hasn't stopped investors looking at strategies to defend their portfolios against a rate hike when it does eventually come. That has generally meant targeting short-dated, higher yielding...

Credit.
March 22, 2004... Investors should brace themselves: some $110 billion of bank loans and bonds are due to mature within the next three years, according to Moody's Investors Service, and that could put a squeeze on refinancing during a period widely expected to...

US Company News.
March 22, 2004... Nortel Networks has entered into negotiations with bondholders to persuade them to hold-off on demanding early repayment on $3.6 billion worth of securities after the communications company failed to file its 2003 annual financial results. ...

Profile.
March 22, 2004... The evolution of Guggenheim Capital Markets reached a milestone last week as the New York-based financial services firm announced its first deal as lead manager - a $130 million refinancing package for Mission Resources Corp.. That deal is...

Market Buzz.
March 22, 2004... Bennett Goodman might not be leaving Credit Suisse First Boston after all. The well-known Wall Street banker was rumored to be in talks with about six private equity firms about possibly defecting, but market sources now say Goodman has begun...

Hedge Fund.
March 22, 2004... Have they had enough of high yield? Yes, some sources say: After squeezing the juice out of the high yield bond market through much of last year and into 2004, hedge funds have started to retreat (in the US, at any rate), and are sinking...

Top Gainers & Losers: Bally/Delta.
March 22, 2004... Bally Total Fitness pumped up its high yield bond prices after the company announced it would simplify its accounting system, in particular its method of recording sales of gym memberships. This was an integral first step for the...

AMG Data's Weekly HY Fund Flows.
March 22, 2004... The amount of inflows into high yield mutual funds moved slightly lower with $265 million in the week ending March 3, according to AMG Data. That amount is just below the $308 million recorded in the week ending March 10. This brings the...

US Company News.
March 29, 2004... Entertainment giant Warner Music Group was on the road last week promoting a financing package consisting of a $1.25 billion bank loan and an $800 million dual-tranche high yield bond issue. The B+/B1-rated debt package supports the $2.6...

Strategy.
March 29, 2004... The repeated widening of corporate bond spreads and increased market volatility following terrorist acts like the Madrid bombings on March 11 - not to mention Israel's assassination of alleged Hamas leader Sheik Ahmed Yassin last week - are...

CDOs.
March 29, 2004... David L. Babson & Company Inc. (Babson) has added its name to the growing number of US financial companies looking to tap into the wealth of opportunities available in the European market. Over the past six months an increasing number of...

The Word Is.
March 29, 2004... Ask any portfolio manager or market analyst for his outlook for the high yield market over the next six months to a year, and you can bet the phase "barring another terrorist attack, I believe that market..." will premise every response. The...

Europe.
March 29, 2004... Although the robust junk markets are currently providing a cheaper alternative than mezzanine finance for many deals, money continues to flow into mezzanine funds at a colossal rate. It appears that European and middle-market deals are...

Credit.
March 29, 2004... At approximately $1.8 billion, catastrophe bond issuance nearly doubled in 2003 compared with previous years, sources at Moody's Investors Service reported. While the insurance sector issuer base has leveled off, corporates may become more...

Observation.
March 29, 2004... While no one is ready to declare a new bull market in merger and acquisitions, the trends are favorable. The availability of financing has increased, valuations have improved, private equity as a percentage of middle-market activity is growing,...

Market Buzz.
March 29, 2004... US Treasury Secretary John Snow will address The Bond Market Association's annual membership meeting in New York City on April 22. The event is the single largest gathering of fixed-income professionals focusing on critical issues such as price...

Market Buzz.
March 29, 2004... Corporate finance directors and chief executives from companies across the country presented at Lehman Brothers' Annual High Yield Bond and Syndicated Loan Conference last week. Many were keen to shore up support among analysts and investors...

AMG Data's Weekly HY Fund Flows.
March 29, 2004... Outflows from high yield mutual funds hit $208 million last week as investors wrestled with a drop in the stock market on security concerns, according to AMG Data Services. This brings year-to-date cumulative outflows to $1.36 billion,...

Weekly HY Gainers & Losers.
March 29, 2004... The markets turned decidedly negative last week, dragged down by high yield companies in the airline sector. Concerns about recent security issues, as well as renewed fare pressure amid escalating fuel prices all weighed on investor sentiment....