Issuance, already slow, should tail off ahead of the Memorial Day weekend, syndicate desk and other sources said yesterday.
"You might still see a couple of things" today, a traded said. "But I think Friday's going to be a nonevent."
Once the weekend is past, the pace could turn "busy," a syndicate source said without naming specific offerings.
Loews Corp. is still rumored to be sniffing the market for a deal that could reach $200 million or more.
Speaking for the company, a source at an investment banking firm said Loews thinks it would be imprudent to discuss near-term financing plans now.
Also in the rumor category is Asian Development Bank, though no size estimate was available yesterday for such an offering.
On the junk bond side, a $100 million senior subordinated note offering due 2003 is expected from Pilgrim's Pride through Donaldson, Lufkin & Jenrette Securities Corp.
Mike Bassett, a vice president at Stone & McCarthy Research Associates, said it is possible that next week could be busy, in part because supply has been slow.
"Obviously, this was a slow week so far and last week was no barn burner," he said.
In addition, interest rates are stable and, as for spreads, "you're going to pay what you're worth," Bassett said.
In the secondary market yesterday, high-grade attention was focused on Wal-Mart Stores Inc.'s two-part $1 billion issue, which was freed to trade.
The spread on the $500 million 10-year piece held steady, while a 20-year piece of equal size tightened slightly, one trader said. Overall, spreads were unchanged in light activity.
High-yield issues were up 1/8 to 1/4 overall, with some late-day activity in Marriott Corp. issues, which were quoted up 1/8 to 1 1/2 points.
New Issues
Old Dominion Electric issued a two-part first mortgage bond offering totaling $250 million.
The first part consisted of $130 million of 7.48% bonds due 2013 at par. Noncallable for 10 years, the bonds were priced to yield 50 basis points more than 30-year Treasuries.
The second consisted of $120 million of 7.78% bonds due 2023 at par. Noncallable for 10 years, the bonds were priced to yield 80 basis points more than comparable Treasuries. Smith Barney, Harris Upham & Co. was lead manager of the offering.
Foamex L.P. issued $160 million of 9.50% senior secured notes due 2000 at par. The notes are callable after five years at 101.583 and moving to par. If the company completes an initial public stock offering it can call 33% of the issue at 109 during the first three years. Moody's rates the offering B1, while Standard & Poor's rates it BB-minus. Donaldon, Lufkin & Jenrette Securities Corp. was lead manager of the offering.
Barnett Banks issued $150 million of floating-rate notes due 1996. Noncallable for a year, the notes were priced initially at par. They float quarterly at 23 basis points over the three-month London Interbank Offered Rate and pay quarterly. Moody's rates the offering Baa1, while Standard & Poor's rates it A-minus. Goldman, Sachs & Co. was sole manager of the offering.
Bank of Hawaii issued $125 million of 6.875% subordinated notes due 2003. The noncallable notes were priced at 99.609 to yield 6.93%, or 78 basis points over comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A. Salomon Brothers Inc. was lead manager of the offering.
Rating News
Standard & Poor' has downgraded James River Corp.'s senior debt to BBB from BBB-plus, the company's Rule 415 shelf-registered senior debt to preliminary BBB from preliminary BBB-plus, and its' preferred stock to BBB-minus from BBB.
The rating agency has also lowered the senior debt ratings on units Brown Co. and Crown Zellerbach Corp. to BBB from BBB-plus, and on Brown's subordinated debt to BBB-minus from BBB. Standard & Poor's affirmed James River's A2 commercial paper rating. It removed all ratings from CreditWatch were it placed them on Jan. 26. Approximately $2.1 billion of debt is affected.
"The downgrades reflect continued weak earnings and cash-flow performance, despite participation in the mostly stable tissue and food packaging industries," a Standard & Poor's release says.
Standard & Poor's has upgraded Petro-Canada's long-term debt to BBB from BBB-minus, affecting $600 million of debt.
The rating agency also put the company's A-3 commercial paper rating on CreditWatch for a possible upgrade.
"The upgrade reflects Petro-Canada's stronger-than-expected operating earnings, improved cash flow, and strengthened capital structure in 1992," a Standard & Poor's release says. "Restructuring measures instituted over the last two years have resulted in a noticeably lower cost base, enabling the company to compete more effectively in the difficult Canadian oil & gas environment."
