Asked on Friday what he thought about Marriott International Inc.'s plans to sell $150 million of 10-year senior notes, F. John Stark 3d had some advice for prospective buyers:

"I guess my comment would be caveat emptor," said Stark, senior vice president and general counsel and investment adviser at PPM America Inc.

PPM America is one of several plaintiffs in a securities fraud lawsuit against Marriott Corp. that charges Marriott knew it was contemplating a restructuring that would split Marriott into two companies when it sold buyers their bonds in the spring of 1992.

Completed in October, the split created two companies, saddling one -- Host Marriott Corp. -- with virtually all of Marriott Corp.'s debt.

Marriott International is involved in lodging and services management. Host Marriott has two principal business areas: real estate ownership, and airport and toll road food, beverage, and merchandise concessions.

In a press release Friday, Marriott International said it has filed a registration statement with the Securities and Exchange Commission to offer up to $150 million of 10-year fixed rate notes. Lehman Brothers, Donaldson, Lufkin & Jenrette Securities Corp., and Smith Barney Shearson will serve as underwriters.

Proceeds from the offering will be used for working capital and general corporate purposes, including repayment of revolving bank debt or other borrowings, the release says. As announced earlier, a group of banks is providing Marriott International with a $1 billion, five-year revolving line of credit.

Asked whether the controversy surrounding the split would hurt investor perception of Marriott International's deal, Marriott spokesman Nick Hill replied:

"I can't speculate on that."

As for the lawsuit, Stark said the discovery phase of the litigation is scheduled to end on Nov. 23. The action should reach the trial phase some time in March.

While the figure given to the total number of bonds covered under the PPM America suit is $120 million, all of the plaintiffs have sold their bonds, Stark said.

Given Marriott's exchange offer, the holders had three choices, he said: exchange the bonds, keep the bonds, or sell them. If the holders exchange their bonds, it would release Marriott from their claims. If they kept the bonds, the bonds would become structurally subordinate. By selling the bonds, the plaintiff in no way weaken their case, Stark said.

In other news, Stone Container Corp. issues have shown strength in the past week.

Stone's 13 5/8% debt due 1995 closed at 93 3/4 cents on the dollar on Nov. 5, and closed at 971/2 Friday. The company's 11 78% debt due 1998 closed at 97 on Nov. 5 and closed at 99 on Friday. Its 1 1 1/2% debt due 1999 was trading at 86 on Nov. 5 and closed at 89 1/4 on Friday. The company's 103/4% debt of 2002 closed at 837/8 on Nov. 5 and was trading at 87 on Friday.

Brian Bogart, a group vice president at Duff & Phelps Corp., said Friday that what may have boosted Stone's and others' fortunes is a perception that an October price increase that the industry called for is sticking.

Optimism that Stone Container plans to spin off its Canadian newsprint operations are progressing may also have helped to lift the company's bonds, Bogart said.

Aside from gains by Stone Container issues, high-yield bond prices ended largely unchanged. In the high-grade market, spreads were unchanged to slightly tighter.

"We did less business today than we did yesterday," one high-grade trader said Friday referring to Thursday's Veterans' Day holiday. Many participants seemed to have taken Friday off, he said.

Ratings News

Standard & Poor's Corp. put the AAA long-term ratings on BellSouth Telecommunications Inc., BellSouth Capital Funding Corp., BellSouth Savings & Employee Stock Ownership Trust, and BellSouth Savings & Security ESOP Trust issues on CreditWatch for a possible downgrade.

Ratings on all affected issuers except for BellSouth Telecommunications are dependent upon BellSouth Corp.'s credit strength. BellSouth Corp., which has an implied AAA senior rating, is the parent of BellSouth Telecommunications and BellSouth Capital Funding.

Consolidated BellSouth Corp. debt totals roughly $9.4 billion.

Concurrently, the BB-plus/BB-minus rating on QVC Network Inc.'s $400 million mixed senior/subordinated debt filed under a Rule 415 shelf registration remains on CreditWatch with "developing" implications. That means the rating could be adjusted upward or downward.

"The BellSouth CreditWatch placement reflects S&P's concerns regarding the strategic direction of BellSouth Corp. following the announcement that the company has agreed to invest $1.5 billion in QVC Networks Inc., contingent upon QVC's acquisition of Paramount Communications Inc.," the Standard & Poor's release says.

BellSouth Corp. and QVC also plan to form a joint venture to ~create, develop, and offer interactive television services worldwide,'" the release says.

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