Barring a sharp finishing kick, this week's new high-grade issues are unlikely to maintain the past month's $4 billion to $7 billion-a-week pace.
According to Securities Data Co., a total of just $571 million of new investment-grade nonconvertible debt was priced on Monday and Tuesday.
That compares with $7.354 billion of fresh debt priced the week of July 5, $4.246 billion for the week of July 12, $7.992 billion for the week of July 19, and $5.213 billion for the week of July 26.
One trader noted that just a single offering, Pacific Bell's $100 million 30-year deal, had been priced by late yesterday. And Wednesdays tend to be a busy time for new issues, he said.
Next week is also likely to be slow as issuers back off from the Treasury Department's quarterly refunding, the trader said.
The government yesterday announced plans to sell a record $38.5 billion of notes and bonds. It will sell $16.5 billion of three-year notes, $11 billion of 10-year notes, and $11 billion of 30-year bonds.
Elsewhere, the Walt Disney Co. has filed a shelf registration to offer up to $1 billion of debt, said Thomas Deegan, a spokesman for the company.
"It's just to replace what we had," Deegan said, adding that the company has no immediate plans for an offering.
The $300 million offering of 100-year bonds that Disney rccently sold exhausted all but about $50 million of a $1 billion shelf the company filed in 1990, he said. Asked if the entertainment company had any plans for another century-long bond issue, Deegan replied, "Not that I know of."
Underwriters will be named whenever Disney decides to tap into the shelf, he said.
In secondary trading yesterday, high-yield bonds ended 1/8 point higher as the market awaited a barrage of new issues. Spreads on high-grade issues remained largely unchanged aside from special situations such as USX Corp.
That debt widened by five to 10 basts points after Standard & Poor's Corp. listed the company and related entities on CreditWatch for a possible downgrade.
"The absence of more significant improvement in energy market conditions, coupled with unfavorable rulings in steel industry trade cases, puts in doubt the extent to which USX's earnings and cash flow will recover from the subpar levels of the last few years," Standard & Poor's said in a release announcing the review.
A rating agency release says USX has approximately $8 billion of debt outstanding.
In the asset-backed market yesterday, Chrysler's Premier Auto Trust 1993-1994 priced $1.25 billion of debt.
A spokeswoman for lead underwriter Bear, Stearns & Co. said the offering marked the tightest spread ever for an auto company's deal.
Backing the certificates are receivables from autos and light trucks loans. The offering contained three tranches, she said.
Class A-1 consisted of $287.5 million of money market notes, making up 23% of the total offering. The notes have a 0.4-year average life and were priced at par to yield 3.45%
Class A-2 consisted of $912.5 million of asset-backed notes, making up 73% of the deal. The notes have a 4.65% total rate of return and a 2.25-year average life. They were priced at 99.9902 to yield 4.70% or 55 basis points over two-year Treasuries.
Class B consisted of $50 million of asset-backed certificates, making up 4% of the total offering. The have a 2.3-year average life. They were priced at 99.897 to yield 5.05%, or 90 basis points over two-year Treasuries.
New issues
Pacific Bell issued $100 million of 6 7/8% debentures due 2023. Noncallable for 10 years, the debentures were priced at 96.262 to yield 7.18%, or 65 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's rates it AA-minus. Lehman Brothers won competitive bidding to underwrite the offering.
Plaid Clothing late Tuesday issued $75 million of 11% senior subordinated notes due 2003. Noncallable for five years, the notes were priced at par. Moody's rates the offering B2, while Standard & Poor's rates it B. Goldman, Sachs & Co. was sole manager of the offering.
Rating News
Standard & Poor's has given a preliminary AAA rating to New Jersey Bell Telephone Co.'s $400 million of senior unsecured debt filed under a Rule 415 shelf registration.
The rating agency also affirmed its AAA rating on New Jersey Bell's existing sentor unsecured debt. Approximately $1.4 billion of debt is outstanding. Proceeds will go to refinancing debt.
"NJB's strong financial position and cost-effective operations in a progressive regulatory environment provide an extremely high level of debtholder protection," a Standard & Poor's release says.
Also yesterday, Standard & Poor's gave SCI Television Inc.'s $373.4 million of 11% senior secured notes series 1 due 2003 a CCC-plus rating. The rating agency said the implied senior secured rating on debt secured by first priority liens is B.
"The triple-C-plus rating reflects SCI's continued high level of debt, the need for future cash-flow growth to refinance bank debt in 1998. and the [financially] aggressive policies of ultimate parent Mafco Holding Inc.," a Standard & Poor's release says.
