Some R.H. Macy & Co. junk bonds rose four points yesterday on rumors that CBS Inc. chairman Laurence Tisch plans to buy the bankrupt retailer.
"As we've often said before, we don't comment on dally movement in the bond prices," a Macy's spokesman said yesterday, "but I don't know of any corporate developments or announcements that would have an impact."
Tisch, who holds about 15% of the company's equity, tried but failed to pull off a $1 billion bailout of Macy's just before the company filed for bankruptcy in January 1992.
Barbara Wedelstaedt, a high-yield analyst at Duff & Phelps/MCM Investment Research Co., said Macy's bonds have staged a steady rise for the past month or so, but that they jumped between three and four points on the Tisch rumor yesterday.
The Tisch rumor has gathered steam following the June 1 announcement that Don Hewitt, executive producer of "60 Minutes" for CBS, has entered into a joint venture with Macy's for a home shopping channel.
Wedelstaedt said that while she has no knowledge of whether the rumor is true, "There's definitely a hot trail there."
By yesterday afternoon, Macy's 14 1/2% senior subordinated debentures due 1998 had risen four points to trade at 38 cents on the dollar. A high-yield trader later said the debentures had gotten up as high as 40.
The 14 1/2% subordinated debentures due 2001 had also risen four points to about 17 cents on the dollar. while the retailer's 16 1/2% junior subordinated discount debentures due 2006 had risen about three points to 12 cents on the dollar.
In mid-June the 12 1/2% debt due 1998 was trading at 25, the 12 1/2% debt of 2001 was at 9 1/2, and the zeros were trading at six cents on the dollar.
That translates to a 13-point gain for 1998 debt, a 7.5-point gain for the 2001 debt, and a six-point gain for the zeros.
The steady rise can in part be explained by Macy's now being in the second phase of its business recovery plan. Its Northeastern stores are doing "better," while its Southeastern stores are doing "well," Wedelstaedt said.
In addition, she said, "People are refocusing on equity valuations and equity performance of bankrupt and post-bankrupt issues," Wedelstaedt said. Most of those issues have outperformed analysts' expectations.
With its long history, Macy's is not perceived by the market as at risk of liquidating, Wedelstaedt said, noting that the company in fact is expected to emerge from bankruptcy as a "viable" competitor.
In secondary trading yesterday, high-yield bonds ended firm over all in light activity. Spreads on high-grade bonds were unchanged.
Now Issues
Connecticut Light & Power Co. priced first and refunding mortgage bonds totaling $300 million.
The first tranche consisted of $200 million of 5.75% bonds due 2000. Noncallable for five years, the bonds were priced at 98.80 to yield, 5.96%, or 60 basis points over comparable Treasuries. A group led by Merrill Lynch & Co. won competitive bidding to underwrite the offering.
The second tranche consisted of $100 million of 7.50% bonds due 2023. Noncallable for five years, the bonds were priced at 99.52 to yield 7.54%, or 95 basis points over comparable Treasuries.
A group led by Salomon Brothers Inc. won competitive bidding to underwrite the offering.
Circus Circus Enterprises Inc. issued a two-part offering totaling $300 million. The first tranche consisted of $150 million of 6.75% senior, subordinated notes due 2003. The noncallable notes were priced at 99.894 to yield 6.765% or 105 basis points over comparable Treasuries.
The second piece consisted of $150 million of 7.625% senior subordinated debentures due 2013 at par. The noncallable debentures were priced to yield 105 basis points over 30-year Treasuries. Salomon Brothers was lead manager of the offering.
Rating News
Standard & Poor's has given an A-minus rating to National Fuel Gas Co.'s $350 million of senior unsecured debt registered under a Rule 415 shelf. National Fuel Gas will sell the debt either as debentures or medium-term notes. The company has about $750 million of debt outstanding, and its rating outlook is stable.
"NFG's utility operations benefit from the integration of pipeline, storage, and distribution operations and adherence to strict cost-control measures," Standard & Poor's said in its release. "As a result, NFG has been able to maintain nearly the lowest residential gas rates in both Pennsylvania and New York, enhancing its competitive position. NFG's extensive underground storage facilities and access to Canadian gas supplies through its own pipeline system places it in an enviable position compared to other Northeast gas utilities."
Moody's Investors Service has given a Ba3 rating to Anchor Bancorp Inc.'s $71 million of senior notes. The notes were issued to the Federal Deposit Insurance Corp. in partial exchange for outstanding preferred stock.
"The rating assignment is based on the thrift's good asset quality and adequate capitalization," a Moody's release says. The rating yesterday marks the first time Moody's has rated the company's debt.
