Corporate borrowers sold roughly $1 billion in debt yesterday as favorable interest rates continue to outweigh risks associated with the record Treasury refundings for the second consecutive session.

The Treasury sold $12 billion of 10-year notes as part of the second leg of the record-high $38 billion quarterly refunding. But issuers, usually wary of offering bonds during an auction, paid no heed as attractive rates induced by Tuesday's ease in monetary policy beckoned.

Meanwhile, the high-yeidl market was up about 1/4 point on continued stock market bulisshness, but traders were bracing for what may be a heavy tide of junk bond sales. French bank Credit Lyonnais said it would sell off the junk holdings of Executive Life Insurance Co. as part of its deal to purchase the failed insurance company.

Late in the session, no selling was reported as the market deciphered the impact of the bond deal.

Investment-grade bonds were 1/8 to 1/4 point lower, traders said.

In the primary sector, Boeing Co. priced $300 million noncallable debentures due 2021. The issue was priced to yield 8.80%, 65 basis points above comparable Treasuries, by senior manager First Boston Corp.

The offering is rated AA3 by Moody's Investors Service and AA by Standard & Poor's Corp.

Merrill Lynch & Co. won $250 million of Mobil Corp. noncallable bonds and reoffered them as 8 5/8 to yield 8.719% in 2021, 57 basis points over comparable Treasuries.

The issue was increased from the original amount of $200 million.

The offering is rated AA2 by Moody's and AA by Standard & Poor's Corp.

Merrill Lynch also won $225 million of Pacific Bell bonds, due Aug. 15, 2031. The bonds were reoffered to investors as 8 1/2 to yield 8.90%.

The issue was priced 75 basis points above the yield for the when-issued, 30-year Treasury coupon.

The bonds are rated A3 by Moody's and AA-minus by Standard & Poor's.

An issue of $100 million American General Finance Corp. noncallable notes was won by Salomon Brothers Inc. The notes were reoffered to investors as 8 1/2 to yield 8.56%, 76 basis points above comparable Treasuries.

The issue is rated Al by Moody's and A-plus by Standard & Poor's.

In ratings news, Standard & Poor's lowered the long-term ratings on Tandy Corp., Tandy Credit Corp., and the Tandy Employee Stock Ownership Plan to A from A-plus. Tandy Corp.'s subordinated debt was also lowered to A-minus from A.

About $1.9 billion of securities is affected.

Standard & Poor's said the downgrade, which reflects a fundamental increase in business risk for the consumer electronics and computer markets, was due to heightened competition. While Tandy's market coverage and dominant position in electronic parts and accessories should keep returns high relative to others in the industry, competition will keep the company's core Radio Shack business from matching its historical returns.

Tandy has countered by developing its own branded retail operations, but because the capital commitment to the new retail formats is expected to be limited, the lack of success would not materially impact bondholder protection, the rating agency said.

Standard & Poor's also said the ratings for Chrysler Corp. and its subsidiary, Chrysler Financial Corp., remained on CreditWatch despite the parent company's announcement of measures intended to strengthen its financial condition.

The BB ratings of Chrysler and Auburn Hills Trust, which is backed by Chrysler, are on CreditWatch with negative implications. The BB-minus senior ratings of CFC and CFC's unit, Chrysler Credit Canada Ltd., are on CreditWatch with developing implications as are CFC's B ratings on subordinated debt and preferred stocks.

Consolidated debt outstanding totals $21 billion, but the ratings of Chrysler's public asset-backed transactions are not affected.

Standard & Poor's said that Chrysler has registered to sell $33 million common shares in a public offering, worth approximately $400 million, and to contribute an additional $28 million shares to its pension funds, valued at about $300 million.

The company has also stated that it may sell its 50% interest in Diamond-star Motors Corp. -- a joint venture with Mitsubishi Motors Corp. -- as well as its remaining 10.99% equity interest in MMC. Successful completioni of these transactions would help to alleviate strain on Chrysler's near-term liquidty. The company's cash position stood June 30 at $2.4 billion, down almost $2 billion from one year earlier. However, the company's ability to stem negative cash flow depends on further improvement in automotive market conditions and successful new product introductions, Standard & Poor's said.

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