More than $ 2.8 billion of U.S. corporate and agency debt joined the Province of Ontario's $ 1.25 billion Canadian global bond offering yesterday.
One high-grade analyst attributed yesterday's heavy volume in part to investors who arrived at the half-year mark with more cash than they had anticipated.
John Madden, an assistant deputy minister of finance for the province, said Ontario's deal "went very well. "
While investor demand exceeded $ 1.25 billion, the province did not increase the offering because it had no need for extra funds at this time, Madden said.
After yesterday's offering, approximately 60% of the province's financing needs for the fiscal year will have been met, he said.
The bonds were priced at 98.125 to yield 70 basis points over the 7.50% Canadian government bond due December 2003. Moody's Investors Service rates the bonds Aa2, while Standard & Poor's Corp. rates it AA.
According to Madden, 31.9% of the deal was distributed in Canada, 16.8% in the United States, 26.4% in Europe, 17.4% in Japan, and 7.5% in the rest of Asia.
Joint lead underwriters on the offering were Merrill Lynch International Ltd., Nomura International PLC, RBC Dominion Securities International Ltd., and Wood Gundy Inc., Madden said.
Last month, the province priced $ 2 billion of U.S. dollar-denominated global bonds.
In other news, Foodmaker Inc.'s junk bonds dipped slightly on news that 325 of its Jack in the Box franchisees filed suit in connection with food contamination last January that caused fatalities.
"We are very disappointed that after extensive negotiations we were unable to resolve the matter in an amicable fashion," said company president Robert J. Nugent. "It is now our intent to defend this suit vigorously. "
A high-yield analyst yesterday said both Foodmaker's 9 1/4% senior notes due 1999 and 9 3/4% senior subordinated notes due 2002 lost about 1/2 point. She said few details about the suit are known and the market is waiting to see what unfolds.
In secondary trading yesterday, high-yield bonds ended about point higher overall, while spreads on high-grade issues ended unchanged.
New issues
Student Loan Marketing Association issued $ 600 million of floating-rate notes due 1996 at par. The notes, which pay quarterly, float weekly at 15 basis points over the three-month Treasury bill. Morgan Stanley & Co. was the lead manager for the offering.
Texas Utilities Electric issued a three-part first mortgage bond offering totalling $ 500 million.
The first tranche consisted of $ 150 million of 5.75% bonds due 1998. The noncallable bonds were priced at 99.767 to yield 5.806%, or 75 basis points over comparable Treasuries. The second piece consisted of $ 100 million of 6.75% bonds due 2005.
The noncallable bonds were priced at 99.75 to yield 6.782%, or 98 basis points over 10-year Treasuries. Part three consisted of $ 250 million of 7.625% bonds due 2025. Noncallable for 10 years, the bonds were priced at 97.763 to yield 7.817%, or 112 basis points over 30-year Treasuries.
Moody's rates the offering Baa2, while Standard & Poor's and Duff & Phelps Credit Rating Co. rate it BBB. Salomon Brothers Inc. was the lead manager.
PNC Bank issued $ 500 million of 3.55% bank notes due 1994. The noncallable notes were priced initially at par and were rated Aa3 by Moody's and A-plus by Standard & Poor's. Duff & Phelps rates the offering AA. Goldman, Sachs & Co. was the sole manager for the offering.
Federal National Mortgage Association issued $ 250 million of 5.24% medium-term notes due 1998 at par. Noncallable for a year, the notes were priced to yield 18 basis points over comparable Treasuries. Merrill Lynch & Co. managed the offering.
Southern California Edison issued $ 225 million of 7.125% first mortgage bonds due 2025. Noncallable for 10 years, the bonds were priced at 96.70% to yield 7.395%, or 70 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's and Duff & Phelps rate it A-plus. Lehman Brothers was the lead manager.
Chase Manhattan Corp. issued $ 150 million of subordinated floating-rate notes due 2003. The noncallable notes float quarterly at 12.5 basis points over the three-month London Interbank Offered Rate and pay quarterly. Moody's rates the offering Baa2, while Standard & Poor's and Duff & Phelps rate it Bbb-plus. Bear, Stearns & Co. was the sole manager.
Aristar issued $ 150 million of 5.75% notes due 1998. The noncallable bonds were priced at 99.846 to yield 5.786%, or 74 basis points over comparable Treasuries. Moody's rates the offering Baal, while Standard & Poor's rates it A-minus. Lehman Brothers was the lead manager.
Marshall & Ilsley Corp. issued $ 100 million of 6.375% notes due 2003. The noncallable notes were priced at 99.351 to yield 6.464%. or 68 basis points over comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A. Goldman Sachs was the lead manager.
Federal National Mortgage Association issued $ 100 million of 6.40% medium-term notes due 2003 at par. Noncallable for a year, the notes were priced to yield 60 basis points over comparable Treasuries. Morgan Stanley was the sole manager.
Commonwealth Edison issued $ 100 million of 6.375% first mortgage bonds due 2000. The noncallable bonds were priced at 99.916 to yield 6.39%, or 95 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's and Duff & Phelps rate it BBB. Salomon Brothers was the sole manager.
Federal Home Loan Banks issued $ 50 million of floating-rate notes due 1995 at par. The notes float monthly at 55 basis points under the cost of funds index and pay quarterly. Lehman Brothers managed the offering.
