More than $900 million of new junk debt could arrive this week, sources in the high-yield market said.
Offerings are expected from Eagle Industries, Fairfield Manufacturing, Continental Broadcasting, US Air Group, LFC Holding, Blount Inc., and Turner Broadcasting.
Merrill Lynch & Co. is underwriting offerings by Eagle Industries, Fairfield Manufacturing, and Continental Broadcasting, which are expected to be priced "early in the week," a source familiar with the deals said Friday.
Eagle Industries is expected to offer $175 million of senior deferred coupon notes due 2003. The amount was raised from $169.5 million.
Fairfield Manufacturing is expected to issue $85 million of senior subordinated notes due 2001. Price talk calls for a yield of 11 3/8% to 11 5/8%, the source said.
Continental Broadcasting may come to market with $120 million of senior subordinated notes due 2003.
Morgan Stanley & Co. is expected to bring a deal for U.S. Air Group on Wednesday or Thursday. The airline is expected to offer $150 million of senior notes due 2003. Price talk was unavailable Friday.
LFC Holdings is expected to offer $85 million of senior subordinated notes due 2003 through Donaldson, Lufkin & Jenrette Securities Corp. Price talk calls for a yield of 9 5/8% to 9 3/4%. The deal could arrive tomorrow or Wednesday.
Blount Inc. is expected to offer $100 million of senior subordinated notes due 2003 through J.P. Morgan Securities Inc. early next week.
Turner Broadcasting is expected to take $200 million to $300 million off a shelf registration. Nobody at Turner could be reached for comment.
On the high-grade side, the market may see "a lot of jockeying for quarter end" positioning because rankings are due out soon, a source at one investment banking firm said.
So far this year, roughly $120 billion of investment-grade straight corporate debt has arrived. That figure excludes floating rate, agency, and asset and mortgage-backed deals, he said.
In secondary trading Friday, high-yield bonds were firm and quiet. Spreads on high-grade bonds were unchanged.
Federal National Mortgage Association issued $1 billion of floating-rate notes due 1994 at par. The noncallable notes float weekly at the Federal Funds rate and pay quarterly. Merrill Lynch managed the offering.
Federal Home Loan Mortgage Corp. issued $150 million of 6.30% notes due 2003 at par. Noncallable for three years, the notes were priced to yield 45 basis points over comparable Treasuries. Merrill Lynch managed the offering.
Carolina Power & Light issued $100 million of 5.375% first mortgage bonds due 1998. The noncallable bonds were priced at 99.55 to yield 5.48% or 35 basis points more than comparable Treasuries. Moody's Investors Service rates the offering A2, while Standard & Poor's Corp. rates it A. A group led by Merrill Lynch won competitive bidding to underwrite the offering.
Merrill Lynch issued a two-part offering of floating-rate medium-term notes. The first tranche consisted of $50 million of notes due July 1, 1994 at par. They float quarterly at five basis points under the three-month London Interbank Offered Rate and pay interest quarterly.
The second piece consisted of $50 million of notes due July 18, 1994. They float daily at 20 basis points over the Federal Funds rate and pay interest quarterly. Moody's rates the offering Al, while Standard & Poor's rates it A-plus. Merrill Lynch managed the offering.
Merrill Lynch issued $100 million of floating-rate notes due 1994. The notes float daily at 245 basis points under the prime rate. Moody's rates the offering Al, while Standard & Poor's rates it A-plus. Merrill Lynch managed the offering.
Moody's is reviewing the Times Mirror Co.'s A1 long-term senior rating for a possible downgrade.
"The review was prompted by Moody's concern that the deepening earnings weakness of the company's newspaper unit, especially its Los Angeles newspaper, combined with ongoing regulatory uncertainties that may negatively affect its cable television segment, could result in a reduction of its debt protection measurements," Moody's said in a release. "The review is also focusing on the potential use of the expected $300 million proceeds from the upcoming sale of the company's television stations."
Moody's confirmed Times Mirror's Prime-1 short-term rating for commercial paper.
Under review for possible lowering the company's A1 senior notes and debentures, A1 medium-term notes, and (P)A1 shelf registration.