CORPORATE SECURITIES

Recent lower Treasury bond yields give junk issuers more reason to come to market and a "warmer" reception once they get there, a high-yield expert said yesterday.

Kingman D. Penniman, an executive vice president at Duff & Phelps/MCM Investment Research Co., said the lower Treasury yields of the past 10 days or so have administered a two-pronged "shot in the arm" to the high-yield market.

While earlier predications forecast a new-issue lull ahead, lower yields will make it cheaper for issuers to offer debt. Mr. Penniman said.

In addition, shrinking yield in other sectors makes the junk market's higher coupons increasingly attractive to investors seeking yield, he said.

"I think there is supply being created to satisfy the demand for yield in a lower-yield [environmental]," Mr. Penniman said.

New names with goals other than refinancing old debt are surfacing in the high-yield market also, he said. Earlier, some of those names may have been unwelcome because investors preferred companies that strengthened themselves by issuing to refinance high-cost debt.

As for some offerings priced between Tuesday and late yesterday, Mr. Penniman said his firm thought Owens Illinois Inc.'s $250 million offering and deals totaling $125 million apiece by Bradlees Inc.'s and Fairchild Industry Inc. were "approximately valued."

He noted, however, that both Fairchild and Bradlees had to add yield to their price talk. Price talk on Fairchild's 12 1/4% offering had been 11 3/4%, while talk on Bradlees 11% offering had been 10 1/2% to 10 3/4%.

In other news yesterday, ENSERCH Corp. said it has called for redemption on Sept. 15 all of its $125 million principal amount outstanding on its 11 3/8% notes due 1995. The notes are being called under provisions of the indenture at par plus accrued interest.

The company also said it will redeem on Oct. 1 all $20 million principal amount outstanding on its 10% convertible subordinated debentures due 2001 under the mandatory and optional redemption provisions of the indenture at par plus accrued interest.

In secondary trading, better quality high-yield issues gained 1/4 to 1/2 point, with some issues that lagged adding as much as a point. High-grade bond prices finished primarily unchanged, one trader said, adding that spreads have begun to widen somewhat the past few days.

New Issues

Unisys Corp. issued $400 million of 10 5/8% senior notes due 1999. The notes are noncallable for five years. Lehman Brothers lead managed the offering. BellSouth Telecommunications Inc. issued $300 million of 7.875% debentures due 2032. Noncallable for 10 years, the debentures were priced at 98.559 to yield 7.995%, or 61 basis points over comparable Treasuries. Both Moody's Investors Service and Standard & Poor's Corp. rate the debentures triple-A. Morgan Stanley & Co. lead managed the offering.

Owens Illinois Inc. late Tuesday issued $250 million of 10% senior subordinated notes due 2002 at par. The notes are callable at 105 after five years. Moody's rates the offering B2, while Standard & Poor's rates it B-plus. Goldman, Sachs & Co. lead managed the offering, which was increased from $200 million.

Federal Home Loan Mortgage Corp. issued $250 million of 4% step-up notes due 1995. Noncallable for a year, the notes step up to 5 1/8 after the call date. Goldman Sachs sole managed the offering.

Southern New England Telephone Co. issued $180 million of noncallable medium-term notes in two parts. The first tranche consisted of $70 million of 7% notes due 2004 at par. The noncallable notes were priced to yield 48 basis points over 10-year Treasuries. The second tranche consisted of $110 million of 7.125% notes due 2007. The notes were priced at 99.317 to yield 7.20%, or 68 basis points over 10-year Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA. Goldman Sachs lead managed the offering.

Alabama Power issued $170 million of 6.375% first mortgage bonds due 1999. The noncallable bonds were priced at 99.471 to yield 6.47%, or 45 basis points over comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A. Salomon Brothers won competitive bidding to lead manage the offering.

Duke Power issued $165 million of noncallable medium-term notes in two parts. The first tranche consisted of $100 million of 5.625% notes due 1997. The notes were priced at 98.81 to yield 5.90, or 35 basis points over comparable Treasuries. The second group consisted of $65 million of 6.250% notes due 1999. The notes were priced at 99.02 to yield 6.42%, or 41 basis points over comparable Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA-minus. Merrill Lynch & Co. won competitive bidding to underwrite the offering.

Burlington Northern issued $150 million of 7% senior notes due 2002. The noncallable notes were priced at 98.275 to yield 7.245% or 71 basis points over comparable Treasuries. Moody's rates the offering Baa 1, while Standard & Poor's rates it BBB. Merrill Lynch lead managed the offering.

Texaco Capital issued $150 million of 8% debentures due 2032. The noncallable debentures were priced at 98.06 to yield 8.165%, or 78 basis points over 30-year Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A-plus. Morgan Stanley lead managed the offering.

Fairchild Industries issued $125 million of 12.25% senior secured notes due 1999 at par. They are callable on Aug. 1, 1997, at 102, then at par in 1998. Moody's rates the offering B2, while Standard & Poor's rates it B. Citicorp Securities Markets Inc. managed the offering.

Westvaco issued $125 million of 8.3% debentures due 2022 at par. Noncallable for 10 years, the bonds were priced to yield 90 basis points over comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A. Merrill Lynch lead managed the offering.

Bradlees Inc. late Tuesday issued $125 million of 11% senior subordinated debentures due 2002. The notes are callable at a premium after five years. The first call is at 104.125. Moody's rates the offering B2, while Standard & Poor's rates it B-plus. Merrill Lynch lead managed the offering, which was increased from $100 million.

Boise Cascade issued $100 million of 7.375% notes due 1997. The noncallable notes were priced at 99.568 to yield 7.48%, or 183 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB-minus.

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