Hydro Quebec sold $1.2 billion of Canadian dollar global bonds yesterday, a 60% increase over the $750 million minimum the utility set earlier.
While not surprised to see the issue increased, Hydro Quebec's financing director, Andre Richard Marcil, was gratified to see the offering reach the utility's "maximum target" of Canadian $2.1 billion.
The offering takes care of 85% of Hydro Quebec's financing for the year, Mr. Marcil said. Demand for the offering exceeded that $2.1 billion by at least Canadian $100 million, he said.
"The issue is already trading at a slight premium," which indicates continuing demand, Mr. Marcil said.
The debentures were issued at 98.734 and were trading at 98.83 by early afternoon, he said.
The utility issued Canadian $1.2 billion of 9.625% debentures due 2022. The noncallable debentures were priced to yield 9.757%, or 85 basis points over the Canadian government's 30-year bonds.
Merrill Lynch International ran the book, a source there said. Moody's rates the offering Aa3, while Standard & Poor's rates it AA-minus.
Approximately 30% of the offering was sold in Canada, 30% in the United States, 25% in Europe, and 15% in Asia. Mr. Marcil said. The bonds were used well distributed, fulfilling mostly smaller-sized orders.
"If the issue is not concentrated in a few hands, it usually assures better competitiveness in the market," Mr. Marcil said.
In the high-yield market yesterday. Riverwood International Corp. issued a two-part offering totaling $400 million. The offering was increased from $250 million.
Riverwood's first tranche consisted of $250 million of 11.25% senior subordinated notes due 2002 at par. The notes are callable after five years at 104.218 moving to par in 2000. Moody's Investors Service rates the offering B1, while Standard & Poor's Corp. rates it B-plus.
The second tranche consisted of $150 million of 10.750% senior notes due 2000 at par. The notes are callable after five years at 103.072 moving to par in 1999. Moody's rates the notes Ba2, while Standard & Poor's assigns a B-plus. J.P. Morgan Securities Inc. lead managed the offering.
Also yesterday, Riverwood sold $12.2 million shares of its common stock in an initial public offering. The company originally expected to sell 11 million shares, offered at $14.25 each, but underwriters exercised a 10% over-allotment option. J.P. Morgan served as lead underwriter. The shares were sold domestically and intentionally.
Elsewhere, Blue Bell Funding Inc. issued $65 million of 11.85% secured extendable adjustable-rate notes due 1999 at par. Moody's rates the offering B1, while Standard Inc. managed the offering.
Also in high-yields, the market saw yet another offering registered with the Securities and Exchange Commission. Market sources said AMC Entertainment Inc. filed a registration statement earlier this week for a two-part offering totaling $200 million through Citicrop Securities Markets Inc. AMC plans to offer $100 million of senior notes due 2000 and $100 million of senior subordinated noted due 2002.
In the agency market, the Student Loan Marketing Association yesterday issued $1 billion of floating rate notes due 1995 at par. The notes pay twice a year, on June 30 and Dec. 30, with the first coupon set at 4.28%. The coupon will be reset annually on June 30 at 20 basis points over the previous May's one-year Treasury auction. If the yield from that auction is greater than 8.75%, the coupon will be set weekly over 91-day Treasuries on a bond equivalent basis for the year until the next reset. Merrill Lynch lead managed the offering.
In secondary trading yesterday, high-grade corporate bonds ended higher with Treasuries. High-yield bonds finished unchanged to off 1/8, traders said.
Yesterday's Issues
First Union Corp. issued $250 million of 8.125% subordinated notes due 2002. The noncallable notes were priced at 99.871 to yield 8.144% or 90 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB-plus. First Boston Corp. lead managed the offering.
Masco Corp. issued $200 million of 6.25% notes due 1995. The noncallable notes were priced at 99.86 to yield 6.301% or 80 basis points over comparable Treasuries. Moody's rates that offering Baal, while Standard & Poor's rates it BBB-plus. Salomon Brothers Inc. managed the offering.
Chase Manhattan Corp. issued $150 million of 8% senior subordinated notes due 1999 at par. The noncallable notes were priced to yield 117 basis points over comparable Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB. Salomon Brothers was lead manager.
Ohio Edison issued $100 million of 8.75% first mortgage bonds due 2022. Noncallable for five years, the bonds were priced at 99.59 to yield 8.788% basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB. Morgan Stanley & Co. lead managed the offering.
Olin Corp. issued $100 million of 8% notes due 2002. The noncallable notes were priced at 99.186 to yield 8.12% or 90 basis points over comparable Treasuries. Moody's rates the offering Baal, while Standard & Poor's rates it BBB. Lehman Brothers lead managed the offering.
National Fuel Gas issued $55 million of 6% medium-term notes due 1995. The noncallable notes were priced at 99.81 to yield 6.07%. Moody's rates the offering A3, while Standard & Poor's rates it BBB-plus. Merrill Lynch lead managed the offering.
Yesterday's Ratings
Moody's yesterday gave a B2 rating to Ralphs Grocery Co.'s planned $300 million senior subordinated note offering.
"The rating is reflective of the company's high leverage [and] modest interest coverage, which is offset by strong market position, long established customer loyalties, slightly improved financial flexibility and debt protection measures, and assumes the successful completion of the stock offering," a Moody's release says.
