Corporate bond spreads continue to widen as new supply hangs heavy and disasters have insurers craving cash, Citicorp Securities Markets Inc.'s head corporate trader said yesterday.

Northern States Power Corp.'s $100 million offering, which was priced to yield a spread of 45 basis points over comparable Treasuries yesterday, would have come at "35 or tighter" just a month ago, Philip Kazlowski, Citicorp's head trader said.

Although Wall Street was holding a lot of paper four or five business days ago, it still took comfort in the belief that the Federal Reserve would come to the rescue with a credit easing, he said. So far, that has failed to happen.

In addition, insurance companies, some of the biggest buyers of corporate bonds, have been hit by claims filed in the wake of the Los Angeles riots and Hurricane Andrew, Kazlowski said.

As a result, insurance companies have had to raise cash, leaving less available to invest, he said.

In high-yield secondary activity yesterday, junk bond prices bounced back from as much as a point early in the day to finish unchanged to 1/4 point weaker, traders said.

In other news, Time Warner Inc. has filed a registration statement with the Securities and Exchange Commission for up to $1.375 billion of senior shelf debt, Ann Hasen, Time Warner's manager of shareholder relations said yesterday.

The filing, made Friday, brings Time Warner's shelf debt total to $1.5 billion, she said. The company had $125 million remaining from an earlier shelf.

Asked if the company was doing the shelf in expectations of a Fed ease, Hasen said, "No. They just decided they want to do this just in case," she said.

Carnival Cruise Lines Inc. also registered with the SEC Friday. It filed to offer up to $500 million of new debt, Tim Gallagher, the company's public relations director said.

Proceeds from the filing would be used for general corporate purposes, he said. The company has not named underwriters, he added.

Asked why the company decided to make the filing now, Gallagher said, "I think the company just wants to be ready to move," he said. Carnival has no specific plans for an offering as of now, he added.

The company last tapped the market on June 30, with $100 million of convertible subordinated notes due 1997, he said.

Elsewhere, Dillard Department Stores Inc. filed with the SEC for a shelf offering of up to $300 million of new debt, a release issued by the company said.

Dillard plans to use the proceeds to reduce short-term and other debt, finance operations, and for other general corporate purposes.

New Issues

The Student Loan Marketing Association issued $200 million of 4.53% notes due 1995 at par. The noncallable notes were price to yield 10 basis points over comparable Treasuries. Morgan Stanley & Co. sole managed the offering.

Northern States Power issued $100 million of 5.875% first mortgage bonds due 1997. The noncallable bonds were priced at 99.805 to yield 5.92%, or 45 basis points over comparable Treasuries. Moody's rates the bonds Aa2, while Standard & Poor's rates it AA-minus. Goldman, Sachs & Co. sole managed the offering.

Yesterday's Ratings

Standard & Poor's has downgraded the claims paying ability ratings of Allstate Insurance Co. and its property/casualty subsidiaries to AA-minus from AA-plus. The agency also lowered claims paying ability ratings of the company's subsidiary Allstate Life Insurance Co. and its subsidiaries to AA-plus from AAA.

Standard & Poor's removed all of the ratings from Creditwatch, where it placed them on Sept. 4 for a possible downgrade.

Allstate subsidiary PMI Mortgage Insurance Co.'s AAA claims-paying ability rating remains on CreditWatch for a possible downgrade, the rating agency said.

"The Allstate property/casualty group downgrade is based on the company's expected nearly $2 billion gross loss from Hurricane Andrew, which made landfall in late August," Standard & Poor's release says, "The life ratings are lowered due to the reduced financial flexibility that results from Hurricane Andrew-related losses suffered by parent Allstate."

Standard & Poor's has downgraded Westinghouse Credit Corp.'s senior debt to A-minus from A, preferred stock to BBB-plus from A-minus, commercial paper to A2 from A1. The actions follow similar downgrades in the ratings of parent, Westinghouse Electric Corp.

About $6.9 billion of debt is affected. The rating outlook remains negative.

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