Columbus Day and a closed Treasury market left the high-grade corporate bond market in neutral yesterday with nothing to drive it, traders said.
"Is there a market?" one high-grade trader asked, adding that with the government market closed, traders had nothing against which to gauge their transactions.
Many market players also took the day off.
"[It's] very, very quiet because of the holiday," another trader said.
A third trader said the only movement he saw was in Pacific Gas & Electric's 8% debt of Oct. 1, 2025, which widened out a basis point or two.
Another high-grade market participant said that while yesterday was quiet, spreads are continuing to widen because of uncertainty surrounding the presidential election and supply pressure.
Last week, a few insurance companies were dumping some corporate and mortgage-backed securities to raise cash following Florida's Hurricane Andrew, he said.
In the high-yield market, prices ended about 1/4 to 1/2 point lower in thin trading.
Traders and other sources said some high-yield mutual funds have been facing redemptions recently, which has put pressure on the high-yield market. As money leaves those funds, they have less to invest in the market, one source explained.
On the new-issue front, upcoming offerings include News America Holdings' three-part issue totaling $1 billion through lead manager Merrill Lynch & Co. The deal consists of $200 million of senior notes due 1999, $600 million of senior debentures due 2004, and $200 million senior debentures due 2012.
A source familiar with the offering said it could come either this week or next, depending upon when an accompanying equity offering is priced.
No new issues appeared to have been priced yesterday. Last week's 31 new issues totaled $5.77 billion, bringing the 1992 total through last Friday to $251.1 billion, according to Newark, N.J.-based Securities Data Co.
Securities Data's figures are for all nonconvertible debt offerings, including agency issues but excluding mortgage-backed and asset-backed deals.
Moody's Investors Service has confirmed Premark International Inc. Baa2 long-term senior-term rating after the company announced it will take a $129 million after-tax charge in the third quarter of 1992 to trim its "loss-ridden" Tupperware operations in the United States.
"While this restructuring should improve Tupperware's profitability in the short-term, the rating agency said that it is concerned that Tupperware's U.S. operations may face a further decline in sales which may not be offset by Tupperware's non-U.S. business," the Moody's release says.
"Although the write-down will result in an operating loss for 1992," the release adds, "there will only be a small effect on cash flow."
Long Term Municipal Issues ($ Bill.)
(Private Placements Included)
February 16.02 122.96
September 18.19 Year Year
Oct. 1-9 5.35 To Date Earlier
Source: Securities Data Co.