Joining a wave of banks and insurance companies looking to get out of the junk bond business, Chase Manhattan Corp. has moved to sell roughly $80 million in junk bonds from its $100 million portfolio.
"We've made a decision to get out of the business," said a spokesman for the bank. "It's a strategic move."
The junk bond portfolio, which was never much larger than $100 million, was managed in Chase's treasury division, the spokesman said.
Selling the bonds would leave Chase with about $20 million in junk bonds still on its books, the spokesman said. He declined to comment on when the remainder of the portfolio might be sold but said the bonds are of the same caliber as those put on the block Wednesday.
The portfolio was said to be well received by the market because it contained a number of relatively high-quality credits. Chase was said to be selling bonds of Turner Broadcasting System Inc., Sealed Air COrp., Owens-Corning Fiberglas Corp., Fort Howard Paper Co., and Cablevision.
Investor Demand Strong for Junk Bonds
"As far as I know, the whole thing was well received and put away," said one junk bond trader.
In addition, the bonds were being sold in a market where investor demand for bonds is strong.
"The high-yeild market in its current condition can cut through a bid list like a knife through butter," said one trader.