Look for Hydro Quebec's $750 million global Canadian dollar bonds this week if market conditions cooperate, the company's financing director said yesterday.
"We are going to attempt to choose the best time for both us and the investors," the director, Andre Richard Marcil, said.
Mr. Marcil added that the 30-year offering could rise to $1 billion if demand warrants. But even if the deal remains at $750 million, "it's still very liquid," he said. "The market wouldn't see very much difference between $750 million and $1 billion in terms of liquidity."
If Hydro Quebec's offering does arrive this week, it would be the second global Canadian dollar bond offering in a two-week stretch. On June 9, Ontario Hydro issued (Canadian) $2 billion of the bonds.
Hydro Quebec had watched the markets since the third week in May, but when Ontario Hydro made the first move, it decided to wait.
"When Ontario announced theirs, we decided to put our plans on the back burner," Mr. Marcil said.
"Two [global Canadian dollar bond offerings] at the same time would be perhaps too much for the market to absorb at once, particularly given the size," he said.
Hydro Quebec will offer its bonds simultaneously in Canada, Europe, Asia, and the United States, Mr. Marcil said. He declined to name underwriters.
The utility will register the bonds, which the Province of Quebec will guarantee, with the Securities and Exchange Commission, Mr. Marcil said.
The offering will be the company's third global Canadian dollar offering. Hydro Quebec issued $1.1 billion of the bonds in June 1991. Those 10-year bonds carried a 10 7/8% coupon. In September, the company issued another $1.1 billion offering, this time of 30-year bonds at 10 1/2%.
Combined with Ontario Hydro's four global Canadian bond offerings, Hydro Quebec's upcoming deal would bring the number of such offerings to seven, totaling roughly $10 billion, Mr. Marcil said. The market is about a year and a half old, he said.
Moody's Investors Service yesterday assigned an Aa3 rating to Hydro Quebec's offering. After the upcoming issue, the utility's shelf registration filed with the SEC last November will have (U.S.) $1.23 billion remaining, a Moody's release said. With the $750 million offering, Hydro Quebec will have completed about 60% of its planned borrowing for the year for both new money and refinancings, the release said.
Welcome Vinnie
Freddie, Fannie, and the other Macs and Maes welcomed a new family member yesterday as the Department of Veterans Affairs unveiled the first "Vinnie Mac" offering, according to a First Boston Corp. release.
The department yesterday launched its $390 million Vendee Mortgage Trust 1992-1, the first offering of its guaranteed REMIC pass-through certificates. First Boston is lead managing the transaction, the release said. REMIC stands for Real Estate Mortgage Investment Conduits.
"While a broad market already exists for securities offered through REMIC programs sponsored by Freddie Mac and Fannie Mae, the VA transaction will be unique in that it will represent the first direct issuance of REMIC securities backed by the full faith and credit of the United States of America," First Boston's release said.
Pricing is expected either late today or early tomorrow, with closing set for June 25, a First Boston spokesman said.
Yesterday's Markets
High-grade corporate bond prices edged up early in the day, but finished unchanged in extremely light activity. High-yield bonds were quiet and unchanged with the focus on new issues, traders said.
Among those new deals is Specialty Retailer's $100 million of senior subordinated notes due 2002, which was filed with the SEC yesterday, sources said. The company also plans a $100 million equity offering. Lehman Brothers will lead both offerings, one source said.
Yesterday's Issues
NationsBank Corp. sold $350 million of 8.125% subordinated notes due 2002. The noncallable notes were priced at 99.75 to yield 8.125%, or 90 basis points over comparable Treasuries. Moody's rates the offering Baa 1, while Standard & Poor's Corp. rates it A-minus. The offering was increased from $250 million. Merrill Lynch & Co. was lead manager.
Pacific Bell issued $300 million of 7.25% notes due 2002. The noncallable notes were priced at 99.715 to yield 7.58%, or 31 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's rates it AA-minus. Lehman Brothers won competitive bidding to underwrite the offering.
Federal National Mortgage Association issued $175 million of 5.67% medium-term notes due 1995. Callable in December, the notes were priced initially at par to yield a spread of 13 basis points over three-year Treasuries. Goldman, Sachs & Co. managed the offering.
Heritage Media issued $150 million of 11% senior secured notes due 2002 at par. Callable after five years, the notes are rated Ba3 by Moody's and BB-minus by Standard & Poor's. Goldman lead managed the offering.
Federal Home Loan Banks issued $100 million of 5.01% debentures due 1994. The noncallable debentures were priced at par to yield the same as two-year Treasuries. First Boston managed the offering.
Federal Home Loan Banks also issued $50 million of 5.625% note due 1995 at par. Noncallable for a year, the notes were priced to yield 10 basis points over comparable Treasuries. Goldman Sachs sole managed the offering.
In a third offering, Federal Home Loan Banks issued $50 million of 6.60% notes due 1997. Noncallable for a year, the notes were priced to yield 15 basis points over comparable Treasuries. Goldman Sachs sole managed the offering.
