Investors had better content themselves with turkey and stuffing on Thursday because the high-grade new-issue market will offer little to feast on this week.
"It's going to be a short week and the [Treasury] market is very depressing," one syndicate official said Friday. "Rates have gone up substantially today."
The official could think of no new issues scheduled for this week.
A second syndicate source said, "I think it's going to be quite quiet."
The Treasury's 30-year bond fell more that 1 1/4 points Friday amid signs that the U.S. economy is rebounding, and fixed-income investors fear inflation will follow.
Reports released last week point to 1993 fourth-quarter growth coming in at approximately 4%. Inflation jitters were activated last week as the Commodity Research Bureau's index posted a three-year high, lifted by higher precious metals and oil prices.
One deal being talked about is a $500 million Australian dollar offering by the Treasury Corporation of Victoria. The corporation is a public authority of the state of Victoria, a source familiar with the deal said. Expectations are for a maturity of three to five years, market sources said.
According to a press release issued through underwriter Merrill Lynch & Co., the authority plans to distribute the global bonds simultaneously in Europe, Asia, and the United States. Merrill Lynch will underwrite the offering together with an international group of co-lead managers.
"The global nature of the bond issue is intended to broaden Treasury Corporation of Victoria's investor base and provide increased financing flexibility," the Merrill Lynch release says. "The global distribution and secondary market trading of the issue will be facilitated by links which have been established between the settlement clearing systems in Europe and the United States."
The issue will trade 24 hours a day, the release says. Moody's Investors Service rates Treasury Corporation of Victoria's outstanding bonds A1, while Standard & Poor's Corp. rates them AA.
In secondary trading on Friday, high-grade activity was light as spreads tightened slightly due to the Treasury market's fall. Junk bonds ended unchanged.
New Issues
Eletson Holdings Inc. issued $140 million of 9.25% first preferred ship mortgage notes due 2003 at par. The notes are callable after five years at 104.62, moving to 103.083 and 101.542. Moody's rates the offering Ba2, while Standard & Poor's rates it BB. Citicorp Securities Inc. was sole manager.
Rating News
Standard & Poor's gave a CCC-plus rating to Burlington Motor Holdings Inc.'s $100 million of senior subordinated notes due 2003. The implied senior rating is B.
"BMH's implied senior rating reflects substantial dependence upon improved rates and operating efficiencies to service the company's heavy debt load and aggressive prospective equipment purchase program," Standard & Poor's said in a release. "The triple-C-plus rating reflects S&P's policy of rating subordinated debt two notches below the senior rating for speculative grade issuers."
Moody's downgraded Lyondell Petrochemical Co.'s long-term senior debt rating to Ba1 from Baa3, and the company's commercial paper rating to Not Prime from Prime-3. The downgrade concludes the review Moody's announced on July 15.
About $720 million of long-term debt is affected.
"[The] Moody's downgrade is based on the persisting uncertain outlook for Lyondell's narrowly focused, upstream commodity petrochemicals business in conjunction with Lyondell's limited financial flexibility and a significant deterioration in debt protection measurements," a Moody's release says. "This limited financial flexibility is a result of weakened earnings and the company's high dividend payout despite the prospect of a cyclical downturn."
