The high-yield and high-grade markets were virtual ghost towns by Friday afternoon as many participants left early for the Memorial Day weekend.
One high-yield trader said nothing was moving in his market.
"If it does anything, it's doing it without me," he said.
The high-grade market proved a bit livelier.
"People are just throwing paper airplanes around the room," a trader in that market said, adding that spreads were unchanged in "very thin" trading.
"There's nothing going on at all, he said. "Half the Street's not even here."
As for new issues, the high-yield market Friday welcomed issues from by Kemmerer Bottling, Uniroyal Technology Corp., and K. Hovanian Enterprises Inc.
The deals capped a blockbuster week for the high-yield market, which saw more than $2 billion of fresh debt priced.
In the high-grade market, the Province of British Columbia is expected soon to issue $1.25 billion of 10-year global Canadian dollar bonds. Joint lead managers will be Merrill Lynch & Co., ScotiaMcLeod Inc., RBC Dominion Securities Inc. and IBJ International plc.
On Wednesday, the high-grade market expects two competitive bid offerings from West Penn Power Co.
The first issue is expected to consist of $102 million of first mortgage bonds due 1998. The second is expected to be $80 million of first mortgage bonds due 2003. Both are scheduled for Wednesday.
In other news Friday, Baltimore Gas and Electric Co. filed a shelf registration with the Securities and Exchange Commission to offer up to $375 million of first and refunding mortgage bonds, according to Chuck Starkey, a senior financial analyst at the company.
"We just like to be prepared," Starkey said, adding that Baltimore Electric would probably get three deals out of the shelf.
Proceeds will be used for general corporate purposes. No underwriters were named.
New Issues
Kemmerer Bottling issued $70 million of senior secured notes due 2000. Noncallable for four years, the notes were priced at 99.396 to yield 11%. Moody's Investors Service rates the offering B3, while Standard & Poor's Corp. rates it B-minus. BT Securities Corp. managed the offering. If Kemmerer completes an initial public offering within two years, it can buy back up to 25% of the bonds at premiums.
Uniroyal Technology Corp. issued $80 million of 11.75% senior secured notes due 2003 at par. Noncallable for five years, the notes were rated B2 by Moody's and B by Standard & Poor's. Salomon Brothers managed the offering. The deal comes with warrants to purchase 800,000 shares of common stock.
K. Hovnanian Enterprises issued $100 million of 9.75% subordinated notes due 2005. The notes were priced at 99.13. They are callable after six years at 104.875 moving to par in the ninth year. Goldman, Sachs & Co. lead-managed the offering.
Rating News
Standard & Poor's affirmed Seagram Co.'s A rating for senior debt and A-minus for subordinated debt.
The rating agency also affirmed the A senior debt, A-minus subordinated debt, and A-1 commercial paper ratings of Joseph E. Seagram & Sons Inc.
The rating outlook remains stable. Outstanding debt totals approximately $3.4 billion.
"The affirmations follow Seagram's announcement that it has purchased a 5.7% equity interest in Time Warner Inc. for about $700 million," Standard & Poor's said in a release. "In addition, the company is seeking Federal Trade Commission approval to acquire up to 15% of Time Warner's outstanding shares."
Standard & Poor's gave a B rating to K. Hovnanian Enterprises Inc.'s $100 million of 9 3/4% subordinated notes due 2005. The notes are guaranteed by Hovnanian Enterprises Inc.
The rating agency also affirmed a B rating on about $152 million of subordinated notes guaranteed by Hovnanian. The company will use proceeds from the issue to retire $50 million of 12 1/4% subordinated notes due 1998 and to pay down bank debt.
"The rating for this Red Bank, N.J.-based home builder acknowledges the company's moderately leveraged capital structure and return to operating profitability after a disappointing net loss in fiscal 1991," a Standard & Poor's release says. "The loss was due primarily to recessionary and Persian Gulf war-related declines in sales in its core New Jersey market."
The release says that during the past two years management has made strides toward improving Hovnanian's capital structure and bolstering its competitive position.
