As the Treasury market bounced up and down yesterday, corporate underwriting desks stayed mostly on the sidelines.

Just three deals totaling $450 million were priced.

After over $ 10 billion in issuance last week, underwriters have plenty of paper -- some with very long maturities -- to digest.

The Treasury's benchmark 30-year bond was Up 3/32 early in the day to yield 6.69%. But later in the afternoon, the bond fell 5/32 to yield 6.70%. It then recovered to close up 10/32 on the day, with a 6.67% yield. At least a few issuers are hoping to test the waters this week.

One issue expected today is a 100 million deal from Torchmark Corp., traders said. The single-A rated 20-year issue is being marketed at 70-75 basis points over comparable Treasuries, traders said.

Junk issuer Maxxam Group Inc. is also expected to come to market, with a 10-year, $200 million issue, high-yield traders said.

Early in the day yesterday, officials from the Province of Quebec denied rumors that they would bring a deal to market soon. Some traders had said the Canadian issuer was planning an intermediate maturity deal for later this week.

In secondary trading, investment-grade bonds were mixed, with spreads slightly wider. In the below investment-grade market, bonds were down 1/8 to 1/4.

Bonds issued by International Business Machines Corp. were unchanged in quiet trading ahead of today's release of second-quarter results.

Although "Big Blue" is expected to report a huge quarterly loss, a possible dividend cut and reductions in the company's work force could passify fixed-income investors, one trader said.

"We aren't seeing a big push to sell," the trader said. IBM'S 8 3/8 bonds due in 2019 were trading at a yield of about 7.56%. or 85-90 basis points more than comparable Treasuries, the trader said.

New Issues

Georgia Power Corp. issued $200 million in bonds in two parts, senior managed by Prudential Securities.

The first tranche consisted of $75 million of 6.35% 10-year first mortgage bonds. Noncallable for five years, the bonds were priced at 98.70 to yield 6.529%. or 60 basis points more than comparable Treasuries.

The second tranche consisted of $125 million of 7.55% 30-year first mortgage bonds. Noncallable for five years, the bonds were priced at 98.829 to yield 7.65%., a spread of 94.5 basis points to comparable Treasuries. The issue is rated A3 by Moody's Investors Service and A-minus by Standard & Poor's Corp. Toronto-Dominion Bank issued $150 million of 10-year floating rate notes senior managed by Morgan Stanley & Co. The noncallable notes pay the three-month London Interbank Offered Rate, or LIBOR, with a minimum of 4. 1 0%. The issue was rated AA3 by Moody's and AA-minus by Standard & Poor's.

The Federal Home Loan Mortgage Corp. issued $100 million of three-year 4.65% notes. The notes, noncallable for one year, were priced at par to yield 4.65%, or 14 basis points more than comparable Treasuries. Goldman Sachs & Co. senior managed the deal.

The $1.1 billion Ford Credit 1993-B Grantor Trust's class A asset-backed certificates were rated triple-A by Moody's Investors Service. The primary assets of the trust are auto loans originated by the Ford Motor Credit Co., Moody's said.

Ratings on the class-A certificates are enhanced by a 7.5% subordination of the class-B certificates and a 1.25% subordination spread account. Moody's said in a release that it has observed an improving credit trend in new Ford securitizations.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.