WestPoint Stevens, WMX Technologies price offerings that prove popular with investors.

WestPoint Stevens Inc.'s $950 million high-yield offering was rumored to be about three times oversubscribed yesterday.

"They are very pleased," Steven S. Anreder, a spokesman for Valley Fashions Corp. and its 95%-owned subsidiary, WestPoint-Pepperell Inc., said of company reaction to investor demand. The offering, done via lead manager Donaldson, Lufkin & Jenrette Securities Corp., was increased from $600 million.

"It really was a super deal," Anreder said. Buyside sources reported the offering as anywhere from 11/2 to four times oversubscribed, though most guesses centered around three times.

Valley and WestPoint-Pepperell are expected to be merged into WestPoint Stevens following a Dec. 10 stockholders meeting, Anreder said. The offering's success is notable considering Valley Fashions emerged from bankruptcy protection some 15 months ago, he said.

The first part of WestPoint Stevens' two-part offering consisted of $400 million of 8 3/4% senior notes due 2001 at par. Noncallable for five years, the notes were rated B1 by Moody's Investors Service and BB-minus by Standard & Poor's Corp.

The second piece consisted of $550 million in 9 3/8% senior subordinated debentures due 2005 at par. Noncallable for five years, the debentures were rated B3 by Moody's and B-plus by Standard & Poor's.

"It was a big deal, and big deals are going to do well in this market," said one buyside source who took a piece of the offering. The deal's size aside, the source said the benefits the manufacturing company is expected to derive from the North American Free Trade Agreement also attracted him.

But Randolph Birkman, portfolio manager of the Pilgrim Group's High Yield Trust, passed on the offering.

"At present I am comfortable with textile exposure in our portfolio, and that's the reason I have passed," Birkman said.

However, he said, judging from calls he received following pricing, interest in the debt remained strong.

"I heard it went very, very well," Birkman said.

In the investment-grade market, a deal by WMX Technologies also fared well yesterday, one portfolio manager said, and was increased to $500 million from $400 million.

"It was kind of a feeding frenzy," although, she said, she thought the deal's spread was too tight.

WMX Technologies issued $500 million of 6 3/8% notes due 2003 at par. The noncallable notes were priced at 99.875 to yield 6.392%, or 60 basis points more than comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it AA-minus. Merrill Lynch & Co. was lead manager.

In secondary trading yesterday, high-yield bonds were a touch stronger in the morning, but "sort of died in the afternoon," one trader said. Prices ended largely unchanged. High-grade bonds ended a quiet day with spreads unchanged to slightly tighter.

New Issues

Federal Home Loan Mortgage Corp. issued $300 million of 4.64% notes due 1996 at par. Noncallable for a year, the notes were priced to yield nine basis points more than comparable Treasuries. Merrill Lynch & Co. managed the offering.

Delta brought to market $100 million of 7.79% medium-term notes due 1998 at par. The noncallable notes were priced at to yield 265 basis points more than comparable Treasuries. Moody's rates the offering Ba1, while Standard & Poor's rates it BB. Goldman, Sachs & Co. was lead manager.

Federal Home Loan Mortgage Corp. issued $100 million of 6.59% debentures due 2008 at par. Noncallable for five years, the debentures were price to yield 77 basis points more than comparable Treasuries. Lehman Brothers was sole manager.

Diamond State Telephone sold a two-part offering totaling $40 million. The first tranche consisted of $20 million of 6 1/8% debentures due 2003. The noncallable debentures were priced at 99.834 to yield 6.148%, or 35 basis points more than comparable Treasuries.

The second consisted of $20 million of 7% debentures due 2023. Noncallable for 20 years, the debentures were priced at 98.746 to yield 7.102%, or 65 basis points more than comparable Treasuries. Moody's rates the offering Aaa, while Standard & Poor's rates it AA-plus. Salomon Brothers was lead manager.

Rating News

Moody's cut Digital Equipment Corp.'s short-term and long-term ratings.

Ratings lowered were: Digital Equipment Corp.'s senior unsecured long-term debt to A3 from A2 and short-term debt to Prime-2 from Prime-1. Moody's action completes a review begun on Sept. 21.

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