Four companies' high-yield offerings may beat the turkey to the table next week, high-yield sources said.
Stone Container Corp.'s $240 million offering, Clark Oil & Refining Corp.'s $200 million deal, Magnetek Inc.'s $125 million offering, and Inland Steel Co.'s $100 million deal are all expected this week.
One analyst described price talk on Magnetek and Inland as "squishy." Talk on Magnetek started in the 10% range, rose to the 12s and fell to 10s again, he said. Clark Oil was thought to be in the mid 10s, he said, but added, "We don't know."
A buyside source said he believed all four deals could be done "inside 11%."
"People just need paper," he said.
Playtex Family Product's $150 million offering is expected the week after Thanksgiving. Deals by Chiquita Brands International Inc. and Mitchell Energy & Development Corp. are expected at any time.
Chiquita may offer $200 million to $300 million from its $350 million shelf registration and Mitchell may offer $200 million from its $400 million shelf.
Looming large is Owens-Illinois Inc.'s $1 billion offering, expected by early to mid-December. In late December or January, MGM Grand Inc. is expected to issue a total of $370 million and Cablevision Industries is expected to issue $150 of senior notes.
The high-yield market in secondary trading was off about 1/4 Friday, with the lower-grade issues hardest hit. High-grade corporates were unchanged in the short end, off about and 1/8 point in the 10-year sector, and down about 1/4 point in the long end.
Thursday's high-grade straight debt issuance totaled $2.3 billion, Joe Miller, an associate at Securities Data Co., said yesterday. It marked the eighth day this year that new issues have hit or surpassed the $2 billion mark. Friday's new issue market proved much quieter.
United States Leasing International Inc. issued $200 million of 8.75% notes due 2001. The noncallable notes were priced at 99.149 to yield 8.88% or 145 basis points over comparable Treasuries. Moody's rates them A2, while Standard & Poor's rates them A. Lehman Brothers lead managed the offering.
Duke Power Co. issued $150 million of first and refunding mortgate bonds due 2021. Nonrefundable for five years, the variable-rate bonds were priced initially at 96.375 to yield 8.717%. Moody's rates the offering Aa2, while Standard & Poor's rates it AA-minus. Goldman won the offering in competitive bidding.
Pittsburgh National Bank issued $50 million of 6.35% deposit notes due 1994. The noncallable notes were priced at par to yield 52 basis points over comparable Treasuries. Moody's rates the bonds Aa3, while Standard & Poor's rates them A-plus. Lehman Brothers sole managed the offering.
Standard & Poor's Corp. has downgraded Western Digital Corp.'s subordinated debt to CCC from B and has removed the rating from CreditWatch, where it was placed Feb. 8 for a possible downgrade.
The action affects approximately $59 million of debt. The implied senior debt rating is B minus.
"The downgrade reflects substantial losses resulting from a deterioration of financial flexibility, continuing unfavorable industry characteristics, and poor operating performance," Standard & Poor's said.
Moody's lowered the long-term debt ratings of Zale Corp. and its subsidiaries Zale Credit Corp. and Gordon Jewelry Corp. The downgrade reflects the erosion of the company's earnings, which has placed it in violation of bank covenants and may cause a default on its public debt in December 1991.
Moody's lowered Zale Corp.'s senior notes to Caa from B1 and senior subordinated debentures to Ca from B3. Zale Credits senior notes were lowered to Caa from B1 and its senior subordinated debentures were downgraded to Ca from B3. It downgraded Gordon Jewelry's senior notes to Caa from B1.
Duff & Phelps Credit Rating Co. has assigned an AA-minus rating to Duke Power Co.'s offering of $150 million first and refunding mortgage bonds from an outstanding shelf registration. Proceeds may be used for construction and to redeem debt.
"The rating recognizes the company's large fixed obligations under its take-or-pay Catawba power buyback contract. The obligation [part of the plant sale agreement] peaks over the next several years. Continued recovery of the levelized Catawba purchased capacity payments is necessary," a Duff & Phelps spokesman said in a release.