Dell Computer delays debentures offering in reaction to technology stock turmoil.

Technology stock turbulence triggered mainly Compaq Computer Corp.'s woes persuaded Dell Computer Corp. to postpone its $115 million convertible debentures offering.

"While the roadshow was going on we were seeing this turbulence in the marketplace," said a company official who asked to remain unnamed.

Dell expected to price the convertible subordinated debentures offering due 2001 shortly after the roadshow, or formalized marketing period, ended Oct. 17, the official said. But because the debentures convert into common stock, the company decided to wait, he said.

"It is a matter of timing right now," the official said. "We are still on file with the Securities and Exchange Commission with this, and we are watching the markets day to day."

Compaq's $70 million in third-quarter losses announced last week surprised the market, Gery Sampere, an analyst at Moody's Investors Service, said. Also last week, Compaq, an industry leader, announced plans to lay off 1,400 workers, about 12% of its workforce, he said.

Last Friday, Compaq Chief Executive Officer Rod Canion was ousted following differences with the company's board of directors, Mr. Sampere said. Moody's had given the issue a prospective first-time rating of B1, a non-investment-grade designation, he added.

Standard & Poor's Corp. assigned the offering a B rating, accounting to Melanie McCrossen, an agency analyst. The agency gave the company an implied senior rating of BB-minus, she added.

Although the $115 million offering has been postponed, the company still has "a fairly sizable cash cushion," Ms. McCrossen said. In April, Dell netted $111 million in gross proceeds from a stock offering, she said.

"A lot of technology companies finance opportunistically whenever market conditions are righ," she said.

As of last Aug. 4, Dell had cash and temporary investment balances totaling $160.7 million available to meet its funding requirements, the company official said.

The high-yield market was unchanged and "pretty dead," one trader said, adding that the upcoming new issues were stealing the focus from secondary trading.

The high-grade market was also unchanged.

Tapping the market was the European Economic Community, which is issued $65.36 million of 6.250% medium-term notes due April 28, 1994. The non-callable notes were priced at par to yield 32 basis points over the two-year Treasury note. Both Moody's and Standard & Poor's rate the deal triple-A. Salomon Brothers Inc. sole managed the offering.

As for private placements, Prudential Capital Corp. yesterday announced it will supply $63 million of construction and permanent financing for the NOARK Pipeline system, a partnership formed by a group of companies to build and own a 258-mile gas pipeline across Arkansas.

Prudential Capital, a Prudential subsidiary, is providing construction financing for the pipeline, and, when the project is complete, will convert the construction financing to an 18-year note issue.

Prudential Capital also has committed up to $3.2 million for a limited partnership interest in the project. The projects' two major sponsors are Arkansas-based Southwestern Energy Co. and Michigan-based Southeastern Michigan Gas Enterprises Inc.

In yesterday's ratings actions, Standard & Poor's placed Illinois Central Railroad Co.'s BB-minus senior debt, B subordinated debt and BBB-minus equipment trust certificate ratings on CreditWatch for a possible upgrade.

The company has approximately $177 million of total debt outstanding, according to a Standard & Poor's release.

"The company's 1991 key operating and financial measures have been stronger than anticipated, particularly in light of the severe downturn in the U.S. economy," the release said.

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