Ontario Hydro Corp. issued a whopping $1.25 billion Canadian of global bonds yesterday, a move that should enhance the market for global Canadian dollar bonds, according to Paul C. Newby, assistant treasurer at the company.

"We want to develop an international market for Canadian dollar bonds," he said, adding that the issue also broadens the company's investor base. The offering comes to approximately $1.1 billion in U.S. currency, he said.

The noncallable 10 1/4% bonds were priced at 99.08 to yield 10.224%, or 58 basis points over the Canadian government's 9 3/4% bonds due 2021.

Moody's Investors Service Inc. rated the bonds Aa2, while Standard & Poor's rated them AA-plus.

Proceeds will be used to repay maturing debt and for capital additions, Newby said.

The offering was made to help fulfill the company's $5.3 billion Canadian borrowing needs for 1991. Prior to the offering, Ontario Hydro had completed three global deals totaling $3 million Canadian in 1991's first half. Together with some domestic offerings, those deals satisfied approximately $4 billion Canadian of the borrowing requirement, Mr. Newby said. One Canadian dollar is equal to approximately .94 [cents].

This latest financing leaves Ontario Hydro some $75 million Canadian shy of its borrowing goal, he said, adding that those funds may be raised either this year or in 1992.

Yesterday's attractive interest rates made the company more comfortable in making the large offering at a longer maturity, he said.

Among U.S. issuers, E.I. duPont de Nemours & Co. also liked yesterday's rates. It had been watching the market to launch its $300 million offering since just after the August unemployment rate was released, said Tim Skidmore, team leader of capital markets at the company.

All ensuing economic news, including the producer price and consumer price indices, proved favorable. So, with the Federal Reserve's lowering of the discount rate, the company decided yesterday was as good a time as it could expect to issue, Mr. Skidmore said.

E.I.duPont issued $300 million of 8.250% notes priced at 99.725 to yield 8.282% or 67 basis points over 10-year Treasuries.

The noncallable notes due 2006 are rated Aa2 by Moody's and AA by Standard & Poor's. Merrill Lynch & Co. managed the deal.

Goldman Sachs & Co. served as sole manager on a $200 million offering issued yesterday by Joseph E. Seagram & Sons Inc. The noncallable 8 7/8% debentures mature in 2011. They were priced at 99.212% to yield 8.96% or 100 basis points over comparable Treasuries. Moody's rates them A2, while Standard & Poor's gives them an A.

Also yesterday, Banc One Corp. issued $170 million of non-callable subordinated notes. The notes were priced at par to yield 8.74% or 109 basis points over comparable treasuries. Moody's rated the offering A2, while Standard & Poor's assigned an A-plus. Salomon Brothers managed the deal.

Overall, the investment grade corporate market finished slightly weaker. The high-yield market traded up in the morning then slowed in the afternoon to finish about an 1/8 point higher.

In the high-yield market yesterday, Viacom International Inc. issued $200 million of 10 1/4% senior subordinated debentures maturing 2001. The noncallable notes were priced at par. The selling concession was $10. Goldman Sachs & Co. was sole manager. Moody's rated the deal Ba3, while Standard & Poors assigned a B-plus.

MagneTek Inc. also hit the high-yield market yesterday, issuing $75 million of 8% convertible subordinated notes. Priced at par, they are noncallable for three years.

Unless previously redeemed by the company, the notes are convertible at any time on or before maturity into MagneTek common stock, at a $16-a-share conversion price.

They are redeemable, wholly or partially, at the company's option any time on or after Sept. 25, 1994, at redemption prices beginning at 105.33% percent of their principal amount and dropping to par on and after Sept. 15, 2000. First Boston Corp. and Salomon Brothers Inc. were co-underwriters. Proceeds will be used to repay bank debt under the company's revolving credit agreement. Moody's rates the issue B2, while Standard & Poor's rates it B.

In the private placement market yesterday, Pennsylvania Enterprises Inc.'s Pennsylvania Gas and Water Co. announced it had sold $50 million of 9.57% first mortgage bonds due 1996.

Proceeds are to repay bank debt used mainly for constructing eight water treatment plants and related facilities, Thomas Ward, the company's secretary, said.

Mr. Ward said Pennsylvania Gas and Water chose the private placement market over the public one because the company could avoid Securities and Exchange Commission registration registration requirements and because buyers had already expressed interest in the bonds.

"Basically, we felt it was a far less expensive process," he said.

Standard & Poor's has withdrawn its B claims-paying ability rating on Investors Mortgage Insurance Co. because the company failed to provide sufficient information, a Standard & Poor's release said. Investors Mortgage Insurance's claims-paying ability rating was lowered to B from BB May 14 in response to continued underwriting losses and significant investment risk, the agency said.

In addition, Fannie Mae's Aug. 27 decision to cancel mortgage insurance policies insured by Investors Mortgage Insurance could further weaken the company's claims-paying ability. The company, which stopped underwriting new business in 1987, is based in Illinois.

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.