A CoreStates Capital Corp. deal proved a crowd pleaser in yesterday's new-issue parade as word also spread of a possible 100-year deal by Dutch bank ABN Amro.
"The bond market was up on Friday because of the employment number, and we are just seeing a follow-up now," said Robert Waldman, director of corporate bond research at Salomon Brothers Inc. "That's why we're seeing issuance."
CoreStates Capital's $200 million offering sold well, one buy-side source said, adding that bank paper has continued to tighten as balance sheets in that sector have improved.
"Bank paper is really popular," the source said, adding, "That's a good name, CoreStates."
He said Chrysler Financial Corp.'s $250 million offering was tightly priced, and other Chrysler issues tightened along with it. The source passed on the Chrysler deal because he was already full of the name, he said.
Also yesterday, Boeing Co. priced a $125 million, 50-year issue that was said to have sold well.
The buy-side source said he holds some Boeing paper but passed up yesterday's deal because it was too long. The length would probably appeal more to insurance companies and others who have to match long-term assets and liabilities, he said.
Mike Bassett, a vice president at Stone & McCarthy Research Associates, noted the varied selection of yesterday's issuers.
"It's broad-based," he said, "It's not like we have four utilities in one day."
As for ABN Amro, the buy-side source who did not know the offering's size or underwriter, said a conference call had been scheduled for the deal.
The bank completed a $250 million, 30-year offering in May through Morgan Stanley & Co. That noncallable 7 3/4% debt was priced at an 80-basis point-spread to Treasuries and was rated Aa2 by Moody's and A-plus by Standard & Poor's.
In secondary trading, spreads on high-grade issues finished unchanged. High-yield issues ended a quiet day up about 1/8 point.
New Issues
Chrysler Financial Corp. issued $250 million of 5.375% notes due 1998. The noncallable notes were priced at 99.806 to yield 5.42%, or 82 basis points over comparable Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB. Salomon Brothers Inc. was lead manager.
Commonwealth Edison Co. sold $235 million of 6.40% debentures due 2005. The noncallable debentures were priced at 99.684 to yield 6.438%, or 120 basis points over 10-year Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB-minus. PaineWebber Inc. was lead manager.
CoreStates Capital Corp. issued $200 million of 5.875% subordinated notes due 2003. The noncallable notes were priced at 99.797 to yield 5.902%, or 67 basis points over comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A-minus. Lehman Brothers was lead manager.
Virginia Electric and Power Co. issued $200 million of 6.75% first and refunding mortgage bonds due 2023. Noncallable for 10 years, the bonds were priced at 98.779 to yield 6.846%, or 80 basis points over the old 30-year Treasury bond. Moody's rates the offering A2, while Standard & Poor's rates it A. A group led by CS First Boston won competitive bidding to underwrite the offering.
U.S. Leasing Corp. issued $150 million of 5.95% notes due 2003. The noncallable notes were priced at 99.73 to yield 5.986, or 77 basis points over comparable Treasuries. Goldman, Sachs & Co. was lead manager.
Boeing Co. issued $125 million of 6.875% debentures due 2043. The noncallable debentures were priced at 99.788 to yield 6.89%, or 84 basis points over the old 30-year Treasury bond. Moody's rates the offering A1, while Standard & Poor's rates it AA. CS First Boston was lead manager.
Anadarko Petroleum Corp. issued $100 million of 5.875% notes due 2003. The noncallable notes were priced at 99.625 to yield 5.925%, or 67 basis points over comparable Treasuries. Moody's rates the offering A3, while Standard & Poor's rates it BBB-plus. Kidder, Peabody & Co. was sole manager of the offering.
Strawbridge & Clothier issued $50 million of 6 5/8% notes due 2003. The notes were priced at 99.16 to yield 6.742%, or 150 basis points over comparable Treasuries. Moody's rates the offering Ba3, while Standard & Poor's rates it BBB. Kidder, Peabody & Co. was sole manager.
New Issues
Standard & Poor's has upgraded Gillette Co.'s and Gillette Finance B.V.'s senior debt rating to A-plus from A. The rating agency also affirmed Gillette's A-1 commercial paper rating.
"The upgrade acknowledges Gillette's continued strong operating performance of well-known consumer brands in its core personnel products businesses, particularly its blades and razors unit," a Standard & Poor's release says. "Despite leading U.S. and international market shares, Gillette is expected to continue to aggressively expand its blades and razors presence."
