The junk market revival continued yesterday, as below-investment grade issuers sold almost $1.1. billion of new debt.

The largest deal was issued by Harris Chemical NA Inc., a unit of Harris Chemical Group Inc. The single-B-rated issuer sold almost $600 million of new debt, including discount bonds that do not pay cash interest immediately.

The Harris issue was priced to yield 10.25% on an eight-year piece and 10.75% on a 10-year piece. Those are exactly the levels that the market had expected, based on preliminary price talk, traders said.

Maxus Energy Corp.'s 10-year issue was priced to yield 9.375%, slightly above the preliminary market talk of 9% to 9.25%.

In the secondary market most investment-grade bonds rallied and spreads narrowed.

Below-investment grade bonds were up 1/8 to 1/2 point, with a few exceptions. Casino bonds were weak after Circus Circus reported disappointing results.

But telephone, cellular, and cable-related issues continued to trade as "story bonds," based on a merger fever ignited when Bell Atlantic Co. said it would merge with Tele-Communications Inc.

Bonds issued by telephone companies, generally rated double-A, underperformed the market again yesterday, as investors expect that further mergers in the sector will hurt their credit quality. In the Bell Atlantic deal, for example, the pristine balance sheet of the regional telephone company will be sullied by the heavy debt load of the wheeling and dealing cable operator.

But cable and cellular issuers, generally rated below investment grade, outperformed the market, since their credit ratings could improve in a merger.

In rating news, Moody's Investors Service raised debt of Chrysler Corp. to Baa2 from Baa3. Commercial paper ratings on Chrysler subsidiaries were raised to Prime-2 from Prime-3. The Moody's upgrade follows and upgrade by Standard & Poor's Corp. two weeks ago to BBB from BB-minus, which in turn followed a Moody's upgrade in September to Baa3.

New Issues

Harris Chemical NA Inc. issued $585 million of debt in the two-part deal. The first part consisted of $250 million of senior secured discount notes due in 2001. The notes noncallable for five years, were priced at 80.147 to yield 10.25%. The notes were rated B2 by Moody's and B-plus by Standard & Poor's.

The second part consisted of $335 million of 10.75% senior subordinated notes due in 2003. The notes, noncallable for five years, were priced at par to yield 10.75%. The notes were rated B3 by Moody's Investors Service and B by Standard & Poor's. Goldman, Sachs & Co. managed the offering.

BHP Finance USA Ltd., a unit of Broken Hill Proprietary Co., issued $500 million of debt in a two-part deal. The first part consisted of $300 million of 5.625% guaranteed notes due in 2000. The notes, noncallable for five years, were priced at 99.750 to yield 5.669%, a spread of 68 basis points over comparable Treasuries.

The second part consisted of $200 million of 6.75% guaranteed debentures due in 2013. The debentures, noncallable for six years, were priced at 99.55 to yield 6.791%, a spread of 78 basis points over comparable Treasuries. Morgan Stanley & Co. managed the issue, which is rated A2 by Moody's and A by Standard & Poor's.

Maxus Energy issued $200 million of 9.375% notes due in 2003. The notes, noncallable for seven years, were priced at part to yield 9.375%. CS First Boston managed the issue, which was rated B1 by Moody's and BB by Standard & Poor's.

Agriculture Minerals and Chemical Inc. sold $175 million of 10.75% senior notes due in 2003. The notes, noncallable for five years, were priced at par to yield 10.75%. Morgan Stanley managed the issue, which was rated B2 by Moody's and B by Standard & Poor's.

Federal National Mortgage Association issued $150 million of medium-term notes due in 2003. The notes were priced at par to yield 5.82%, a spread of 82 basis points over comparable Treasuries. CS First Boston managed the deal.

Jersey Central Power and Light Co. issued $150 million of 6.75% first mortgage bonds due in 2025. The bonds, noncallable for 10 years, were priced at 98.887 to yield 6.386%, a spread of 83 basis points over the 7 1/4 0/0 30-year Treasury bond. Morgan Stanley managed the issue.

Sifto Canada Inc., another unit of Harris Chemical Group, issued $100 million of 8.5% senior secured notes due in 2003. The notes were priced at par to yield 8.5%. Goldman Sachs managed the issue, which was rated B1 by Moody's and BB-minus by Standard & Poor's.

Sevel Argentine SA sold $100 million of 8.5% bonds due in 1996 in the U.S. under Securities and Exchange Commission Rule 144a. The bonds were priced at 99.784 to yield 8.583%, a spread of 450 basis points over comparable Treasury notes. Citibank International managed the offering.

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