High-grade bond prices yesterday moved higher with Treasuries, which gained on flat weekly jobless claims and a widening merchandise trade gap in April.
"They're tracking Treasuries," one trader said. "It's a pretty quiet day." Treasuries gained 1/4 point in the long end.
Jobless claims for the week ended June 6 totaled 407,000, almost identical to the previous week's tally. The trade gap grew to $6.97 billion from $5.58 billion.
"We're up a little bit, and we had a bunch of supply," a second high-grade bond trader added.
Junk prices finished 1/8 to 1/4 point lower in sympathy with the stock market, high-yield traders said. The Dow Jones Industrial Average fell 13.64 points yesterday.
Among the issues under pressure was Petrolane's 13 1/4% senior subordinated debentures.
They traded in the 35 1/2 to 36 range yesterday afternoon, down from 37 1/2 to 38 on Wednesday and 42 on Monday, one trader said. The volatility stems from a potential bid for the company, he said.
In other news, Anchor Glass Container Corp. yesterday said its interest costs should drop by about $3 million annually after it placed $100 million of 10.25% notes privately. The notes due 2002 were sold to institutional investors through Donaldson, Lufkin & Jenrette Securities Corp., Anchor, a subsidiary of Vitro S.A., said in a release.
Anchor has instructed the trustees for its outstanding 10 3/4% subordinated sinking fund debentures due 1998 and 13 1/4% subordinated notes due 1995 to call those securities for redemption. The 10 3/4% debentures will be called on July 20 and the 13 1/4% notes will be called Dec. 15, the release says.
Proceeds from the private placement will substantially fund those redemptions, the release notes.
Also yesterday, Leucadia National Corp. said it would redeem on July 22 all its outstanding 14% senior subordinated notes due May 15, 1993. Leucadia will redeem the notes at $1,000 per $1,000 principal amount plus accrued interest for the 67 days from May 15, 1992, the most recent semiannual interest payment date, to redemption date, according to a company release.
Duquesne Light Co. also announced debt redemption plans yesterday. Duquesne said it would redeem its 10.125% first mortgage bonds due Feb. 1, 2009. The company will redeem the notes on July 21, 1992 at a price equal to 105.47% of the bonds' principal amount. More than $93 million of the bonds remain outstanding, a Duquesne Light spokesman said.
In other news, a progress report Olympia & York Developments Ltd. submitted to a Canadian court contains a proposal to extend all debt maturities for five years, except for some marketable securities loans that would be liquidated within a year.
The proposal is part of a draft plan that an Olympia & York spokesman described as an "evolutionary step" toward a final restructuring plan. It is being devised in concert with lenders, he said.
The plan also calls for secured creditors, except for certain marketable securities lenders, to keep their full claim against the collateral backing their loans for the entire period of the restructuring plan.
Creditors would also get some initial equity compensation in the form of Olympia & York Development common shares for their participation in the plan.
Westinghouse Electric Corp. issued $350 million of 8.375% notes due 2002. The noncallable notes were priced at 99.25 to yield 8.487%, or 130 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it A. Morgan Stanley & Co. lead managed the offering.
The Republic of Turkey sold $250 million of 9% sovereign Yankee bonds due 1999. The bonds were priced at par to yield 222 basis points over comparable Treasuries. Moody's Investors Service rates the offering Baa3, while Standard & Poor's Corp. rates it BBB. J.P. Morgan Securities Inc. lead managed the offering.
Canadian Pacific Forest Products issued $200 million of 9.25% debentures due 2002. The noncallable notes were priced at 99.80 to yield 9.28% or 210 basis points over comparable Treasuries. Moody's rates the offering Bal, while Standard & Poor's rates it BBB. Goldman, Sachs & Co. lead managed the offering.
NAC Re Corp. issued $100 million of 8% senior notes due 1999 at par. The noncallable notes were priced to yield 122 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it A-minus. Dillon Read & Co. lead managed the offering.
Svenska Handelsbanken issued $100 million of 4.35% deposit notes due 1993 at par. The noncallable notes were priced to yield 31 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's rates it AA-minus. Lehman Brothers sole managed the offering.
Household International issued $100 million of 5.75% notes due 1994. The noncallable notes were priced at 99.649 to yield 5.94% or 95 basis points over when-issued two-year Treasuries. Moody's rates the offering Baal, while Standard & Poor's rates it A. Goldman, Sachs & Co. sole managed the offering.
Fieldcrest Cannon issued $85 million of senior subordinated debentures due 2004 at par. The bonds are callable after five years at 105.625 moving to par in 2002. A 33% annual sinking fund begins in 2002. Moody's rates the offering B2, while Standard & Poor's rates it B-minus. Kidder, Peabody & Co. sole managed the offering.
Standard & Poor's has downgraded Manville Corp.'s senior unsecured debt to B from BB-minus and preference stock to B-minus from B. The agency also lowered Manville unit Schuller International Inc.'s senior secured debt to B-plus from BB-minus.
The ratings agency has removed the ratings from Credit Watch where it placed them April 7 for a possible downgrade. Approximately $1.06 billion of total debt remains outstanding.
"The actions follow completion of equity and debt offerings by Manville's Riverwood International Corp. subsidiary," a Standard & Poor's release says. "The downgrades reflect substantially greater Riverwood debt with priority on that subsidiary's operating cash flows, thereby reducing the credit quality of debt and preference stock at the parent company."