Institutional net purchases of corporate bonds soared to $2.2 billion daily in August, doubling July's $1.1 billion of daily purchases, according to a recent report by Securities Industry Association.

SIA also reported that the value of institutional corporate debt trading reached a record high of $28.1 billion daily in August, surging 29% from July's $21.7 billion.

Increased eligibility of securities for the Depository Trust Co.'s institutional delivery system accounts for some -- but not all -- of the increase, Jeffrey M. Schaefer, an SIA senior vice president, said yesterday. That change, which allows more trades to be counted, occurred several months ago, he said.

"In all of this year, we are seeing more activity and net purchases by institutions of corporate bonds," Mr. Schaefer said.

"They thought the Fed would ease, and they have, and they seem to anticipate further easing," he said. "They want to enjoy the price appreciation."

Depending on certain factors, the institutional feeding frenzy may continue, according to an SIA report by Mr. Schaefer and Grace Toto, a research associate.

"If there is no change in the direction of interest rates and if corporate earnings reports for the third quarter are not too discouraging, the type of institutional behavior we saw in August could continue to drive security prices upward, despite an anemic economy," the report says.

One high-yield corporate issuer, Century Communications Corp., offered $204 million of 11.875% senior subordinated notes priced at par and maturing in 2003. The notes are noncallable until April 15, 1997.

The offering stems from a March shelf registration, one analyst said. Donaldson, Lufkin & Jenrette Securities Corp. managed the sale, and they showed it to investors during a recent high-yield conference that the firm sponsored.

Moody's Investors Service Inc. is expected to rate the notes B3, while Standard & Poor's Corp. is expected to rate them B-minus. The company is expected to use plroceeds from the notes to call $200 million of 12 3/4% reset notes on Oct. 15, one analyst said.

Among other high-yield issuers yesterday, P&C Food Markets Inc. did not price as expected its $125 million senior note deal by press time. Meanwhile, a subsidiary of Rogers Communications had expressed interest making a $250 million offering through Merrill Lynch & Co., the analyst said.

Also yesterday, Kemper Corp. announced it had cut its high-yield securities by $266.8 million in the third quarter of 1991, a company spokeswoman said. Kemper undertook the reduction to improve the market position and financial strength of its insurance companies. The company's holdings of below investment-grade securities fell to about 11.5% of its consolidated invested assets and cash as of Sept. 30, 1991. Kemper achieved the reduction mainly through sales, but it also reflects net upgrades, maturities, and redemptions.

In other news, David A. Blumberg joined County Natwest Global Securities Ltd. as a high-yield bond trader. Information concerning Mr. Blumberg's previous employment was unavailable at press time.

Overall, the high-yield market's better names were up between 1/8 to 1/4 point, while the market's lower end was down by about the same amount. The investment-grade market was unchanged.

As for investment-grade issuers, Associates Corp. NA issued $300 million of 7.50% notes due 1996. The noncallable notes were priced at 99.60 to yield 7.598% or 80 basis points over comparable Treasuries. Moody's rates the deal A1, while Standard & Poor's rates it AA-minus.

In other news, the National Association of Securities Dealers Inc. has expelled an Oklahoma firm for fraud involving corporate, government, and utility bonds, NASD said.

NASD's Board of governors expelled Tulsa-based Fitzgerald, DeArman & Roberts Inc. from the association and fined two company officials, NASD said.

Larry Dale Harrison, compliance officer and principal, was fined $50,000 and is prohibited from associating with NASD members in any capacity for 90 days.

NASD also issued Eric Linton Witherow, a registered representative in the firm's Irvine, Calif. office, a $30,000 fine.

The association found that on two separate occasions in 1987, the firm, acting through Mr. Harrison and Mr. Witherow, engaged in "adjusted trading" involving government securities.

They purchased U.S. Treasury, utility, and corporate bonds at prices not reasonably related to the current market from a public customer and then sold Federal National Mortgage Association and Student Loan Marketing Association bonds to the same customer at substantially inflated prices.

Fitzgerald, DeArman & Roberts is currently in bankruptcy, according to Dorothy Messner, a spokeswoman for the trustee in charge of liquidating the firm's assets.

In ratings news, Moody's lowered the credit ratings of UFS&G Corp. and its property/casualty and life insurance subsidiaries' financial strength ratings.

The downgrade reflects the increasing risk associated with USF&G's commercial real estate investments as well as reduced creditor and policy holder protection stemming from continued pressure on the company's profitability.

Management's actions to reduce operating expenses should yield significant long-term benefits.

Moody's lowered the following ratings:

USF&G Corp. -- ratings on senior notes and bonds to Ba2 from Baa3; ratings on convertible exchangeable and cumulative convertible preferred stock to Ba2 from Baa3; rating on shelf registration to (P)Ba2 from (P)Baa3; rating from commercial paper to Not Prime from Prime-3.

United States Fidelity and Guaranty Co. -- rating for insurance financial strength to Baa2 from Baa1. Fidelity and Guaranty Life Insurance Co. rating for insurance financial strength to Baa3 from Baa1.

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