Dial Page Inc. has postponed its $75 million junk bond offering, citing high-yield market conditions and "other factors."
"It may come back," Lisa Crowen of Dial's investor relations department said yesterday, referring to the issue.
She declined to specify what other factors contributed to the company's decision.
Dial has also called off a related refinancing of existing high-yield debt.
"It's been tough these last few weeks to get some deals done," one high-yield analyst said, adding that the market is starting to improve a bit. "Buyers are still being very selective." he said.
Unlike a month or two ago, high-yield players are no longer "awash with cash," the source said. He declined to comment specifically on Dial's planned offering because he had not reviewed it closely.
Dial yesterday, however, completed its initial public offering of 1,500,000 common shares at $11 a share. Alex. Brown & Sons lead-managed the deal.
Dial Page also plans to sell 212,500 shares at the same price directly to certain purchasers. The company has also given underwriters a 30-day option to purchase up to 225,000 more shares to cover overallotments. The stock will trade over the counter on the NASDAQ National Market System.
Of the net proceeds from the offering and additional stock sales, about $12 million will be used to prepay debt and $3.6 million will be available for capital expenditures, acquisitions, and general corporate purposes, according to a company release.
In secondary trading, investment-grade issues tracked Treasuries, finishing mostly unchanged on the day.
"The big guys are long [on] paper like crazy," one trader said.
Meanwhile, spreads on American Telephone & Telegraph Co. issues widened about 10 basis points following its announcement of a possible McCaw Cellular Communications Inc. acquisition.
High-yield bonds ended unchanged to up 1/4 point on the broader market, while the McCaw news continued to lift some cable issues even higher.
In other news yesterday, the National Cooperative Bank in Washington yesterday sold the first securities ever backed by mobile home park mortgages.
Called "MAGIC Securities," they represent a $13.5 million pool of mortgages on Tampa, Fla.-area senior living communities. One of the country's largest national investors in mortgage-backed securities purchased them.
The pool, made up of adjustable-rate loans with 10- to 15-year terms, was priced at 260 basis points over comparable Treasuries.
Duff & Phelps Credit Rating Co. rates the securities AA. MAGIC stands for Manufactured/mobile homes, Adjustable rate mortgages, Golden years/golden investments, Investment, Cooperative.
New Issues
Federal Home Loan Banks issued $187 million of 5.13% notes due 1995. The noncallable notes were priced initially at par to yield 11 basis points over when-issued three-year Treasuries. Goldman, Sachs & Co. sole managed the offering.
Federal National Mortgage Association issued $150 million of 5.11% medium-term notes due 1995. The noncallable notes were priced initially at par to yield 11 basis points over when-issued three-year Treasuries. Goldman Sachs sole managed the offering.
The mortgage association also issued $150 million of 6.25% medium-term notes due 1997. Noncallable for a year, the notes were priced at 99 30/32 to yield 6.265%, or 35 basis points over comparable Treasuries. Lehman Brothers managed the offering.
Baxter International issued $150 million of 7.625% notes due 2002. The noncallable notes were priced at 99.93 to yield 7.635%. or 75 basis points over comparable Treasuries. Moody's rates the offering A3, while Standard & Poor's Corp. rates it A-minus. First Boston Corp. lead managed the offering.
U.S. Leasing issued $150 million of 7% notes due 1997. The noncallable notes were priced at 99.847 to yield 7.036%, or 112.5 basis points over comparable Treasuries. Moody's rates the offering A2. while Standard & Poor's rates it A. Lehman Brothers managed the offering
The Federal Home Loan Banks issued $210 million of 5.26% notes due 1995. Noncallable for a year, the notes were priced initially at par to yield 25 basis points over when-issued three-year Treasuries. Bear, Stearns & Co. won competititive bidding to underwrite the offering.
Federal Home Loan Banks issued $120 million of 6.28% notes due 1997. Noncallable for a year, the notes were priced initially at par to yield 36 basis points over when-issued five-year Treasuries. Bear Stearns won competitive bidding.
Federal Home Loan Banks issued $45 million of 6.92% notes due 1999. Noncallable for a year, the notes were priced at par to yield 51 basis points over comparable Treasuries. First Union Securities Inc. lead managed the offering.
Federal Home Loan Banks issued $30 million of 7.52% debentures due 2002 at par. Noncallable for three years, the debentures were priced to yield 66 basis points over when-issued 10-year Treasuries. Donaldson, Lufkin & Jenrette Securities Corp. lead managed the offering.
