Retailers serving Midwest communities should see improved sales when flood waters subside. but the uptick will be modest, analysts say.

Robert E. Lupo, director of highyield research at PaineWebber Inc., said that while he does not see any big run-up in sales ahead, he does foresee "an improvement."

Among those likely to benefit are stores such as Wal-Mart Stores Inc., Target Stores, and K Mart Corp., Lupo said. He said better sales will be timed according to receipt of insurance funds.

He noted, however, that news reports have said many people in flooded areas will not receive payments.

Duane Norris, a senior vice president in Lehman Brothers' highyield department, said that because flood insurance is usually optional on insurance policies, many of the affected home owners lack coverage.

In that respect, the flood victims are worse off than those who suffered through Hurricane Andrew because those victims typically were covered under their policies, Norris said.

Nevertheless, as people return to their homes, they will have to replace a wide Array of personal belongings. That should translate to improved earnings for high-yield companies such as Payless Cashways Inc. and Levitz Furniture Corp., according to Norris.

A third analyst, who asked not to be named, sees a "one- to two-month [upward] blip in sales" starting in September as children head back to school. She cited department store Sears, Roebuck and Co. and appliance seller Circuit City Stores Inc.

Shoppers will be in the market for "the things that people absolutely need," and discount stores will be most likely to benefit, the analyst said.

While agreeing that some corporations could see a modest boost stemming from the Mississippi River flooding, one economist said the disaster is unlikely to have a longterm effect on credit quality.

"It's not going to provide a fundamental improvement for the credit quality of any company that I can think of off hand." John Lonski, a senior economist at Moody's Investors Service, said yesterday.

In other news, Forest Oil Corp. said it filed a registration statement with the Securities and Exchange Commission to offer $ 100 million of senior subordinated notes due 2003, said Leslie D. Young, a company spokeswoman.

Proceeds for the offering will be used to repay higher-cost debt, she said.

In secondary trading, the highyield market ended a slow day mixed, with some issues stronger and others weaker.

"There was so little activity in the Street," one trader said, nothing that the market moved "sideways."'

"I would say the overriding feature is it's illiquid and slow," he said. Among losers were bonds of R.H. Macy & Co., which ended 1/8 to 1/4 point lower, he said.

Spreads on high-grade issues ended unchanged as participants watched the currency situation and Europe, and the yield on the 30-year Treasury bond, which at one point fell to 6.50%.

New Issues

Norwest Financial issued $150 million of 8.125% notes due 2003. The noncallable notes were priced at 99.266 to yield 6.23% or 43 basis points over comparable Treasuries. Moody's rates the offering Aa3, while Standard & Poor's Corp. rates it AA-minus. Merrill Lynch & Co. lead-managed the offering.

CIT Holdings issued $150 million of floating-rate notes due Aug. 10, 1994. The noncallable notes were priced initially at par. They float daily at 265 basis points under the prime rate. They pay quarterly. Moody's rates the offering Al, while Standard & Poor's rates it A-plus. Goldman, Sachs & Co. was sole manager.

Arizona Public Service Co. issued $100 million of 7.250% first mortgage bonds due 2023. Noncallable for 10 years, the bonds were priced at 98.199 to yield 7.4%. Moody's rates the offering Baa2. Standard & Poor's rates it BBB, and Duff & Phelps Credit Rating Co. rates it BBB-plus. First Boston Corp. lead-managed the offering.

American Express Credit Corp. issued $100 minion of 6.25% step-up notes due 2005 at par. The notes are noncallable for seven years, after which the coupon steps up to 7.45%. Moody's rates the offering Aa3, Standard & Poor's rates ft A-plus, and Duff & Phelps rates it AA-minus. Lehman Brothers sole-managed the offering.

Tektronix Inc. issued $100 million of 7.5% notes due 2003. The noncallable notes were priced at 99.49 to yield 7.574% or 175 basis points over comparable Treasuries. Moody's rates the offering Ba2, while Standard & Poor's rates it BBB-minus. J.P. Morgan Securities Inc. lead-managed the offering..

Metropolitan Bancorp issued $20 million of 8.5% subordinated notes due 2003 at par. The notes are noncallable for three years and at par after. Interest is paid monthly. Dain Bosworth Inc. lead-managed the offering.

Ratings News

Moody's has given a B3 ratings to Marvel Holdings Inc.'s senior secured discount notes due 1998 and Marvel (Parent) Holdings Inc.'s senior secured discount notes due 2003.

Marvel Holdings senior notes have already been sold, while proceeds from Marvel [Parent] Holdings will be distributed to the company's ultimate parent, MacAndrews & Forbes Holdings Inc., and used to repay debt of the ultimate parent's affillates.

Marvel (Parent) Holdings senior secured notes win be secured by I 0 million shares of Marvel Entertainment Group common stock. Marvel Holdings senior secured notes will be secured by 24 million shares of Marvel Entertainment. The two issuers own 80% of Marvel Entertainment's outstanding common stock.

"Moody's' rating on the senior notes is based upon Marvel Entertainment's important market share in a high margin segment, its broad titles and product base, and stable revenues," Moody's said in its release.

The rating agency said those benefits are offset by high leverage and other factors.

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