Visions of investment-grade status sent Johnston Coca-Cola Bottling Group Inc.'s junk bonds up 10 to 12 points Friday after Coca-Cola Enterprises announced plans to acquire the company.
Doug Long, a vice president at Duff & Phelps/MCM said Johston's 11 1/2% notes due 2001 were bid up to 112 from 103 earlier in the day, while its 11 3/8% notes also due 2001 were soared to 111 from 103.
Mr. Long said determining the bonds' true value was difficult because many traders were out of the office at the start of the Labor Day weekend.
Standard & Poor's Corp. reacted to the merger news by placing Johnston Coca-Cola's BBB-minus senior unsecured debt and BB-plus subordinated debt rating on CreditWatch for a possible upgrade following the merger announcement. The agency simulatneously affirmed Coca-Cola Enterprises' A-minus senior debt and Al-plus commercial paper ratings.
The junk market overall was up about a 1/8 to 1/4, traders said.
In the private placement market, the high-yield news was not as rosy.
Like Securities Data Co.'s figures released early last week, IDD Information Services' first half private placement numbers revealed a more than 70% decline in highyield private placements.
IDD's 1991 first-half figures for non-invesment private placements show a 70.7% drop, while Securities Data's numbers showed about a 75% decline.
Non-investment grade private placements dropped to $1.6 billion in this year's first half, down from $5.4 billion during 1990's first half, a more than 70% drop.
Private placements over all, excluding medium-term and deposit notes, also declined -- though less sharply -- dropping to $49.7 billion during this year's first half from $62.3 billion during the same period in 1990.
In a dramatic improvement over last year's ninth-place finish, Kidder, Peabody & Co. emerged the winner in IDD's non-investment grade rankings with seven issues totaling $485 million for a 30.6% market share.
In 1990, Kidder tallied eight issues totaling $356.6 million for a 6.6% market share. Donaldson, Lufkin & Jenrette Securities Corp. followed with five issues totaling $231.9 million for a 14.6% market share. PaineWebber Inc. was next with seven issues totaling $205.2 million for a 12.9% market share.
As expected, Goldman, Sachs & Co. took top honors in the investment-grade race with 79 issues totaling $6.9 billion for a 14.0% market share. Though its market share remained relatively steady at 14.1% for this year's first half, Goldman saw dollar volume drop by $1.9 billion from last year's $8.8 billion of issues.
Salomon Brothers placed second with 97 issues totaling $5.2 billion. Salomon's dollar volume was down slightly this year compared to last, when the firm placed third with 80 issues totaling $5.9 billion for a 9.4% market share.
Third place finisher J.P. Morgan Securities had 50 issues this half totaling $4.2 billion for an 8.5% market share, also a notable dollar volume drop from 1990 when the firm handled 84 issues totaling $6.9 billion for an 11% market share.
Rule 144A deals posted big gains, moving to $6.5 billion in 1991 from $1.2 billion last year. The surge is not surprising since Rule 144A was enacted in April 1990.
In other private placement news, Alex. Brown & Sons Inc. expects to hit the market soon with three private placement deals totaling $100 million, and is working on a fourth issuer's deal.
The firm's private placement group is readying a $25 million offering by a regional airline, a $50 million senior note deal by an air freight carrier, and a $25 million offering by a financial institution, a market source said.
The regional airline deal includes $20 million of debt and $5 million of equity. Alex. Brown is also working on a fourth deal, this one by a healthcare firm, the source said.
High-grade corporate bonds were unchanged.