In a time-honored Christmas tradition, this week's high-grade new-issue market is expected to be as exciting as "Hazel" television reruns.
"It will be deadsville," one high-grade syndicate member said.
"Between now and the first of the y.ear I don't see anything," another syndicate official said. "It's going to be real quiet."
On Friday Banco Rio de la Plata an issuer from Argentina, priced $250 million of negotiable obligations. The 8 3/4% obligations were priced at 99.845 to yield 8.773% or 299 basis points more than comparable Treasuries. Goldman, Sachs & Co. was lead manager
As for high-yield deals, "We're finished for the year," one official said. He noted, however, that some other firms have business left.
Lead manager Donaldson, Lufkin & Jenrette Securities Corp. is expected to bring Santa Fe Hotel Inc.'s $115 million of first mortgage notes due 1996 to market today, a high-yield source said.
Another junk market source said Acme Boot Co. priced a $60 million Rule 144A offering Friday through sole manager CS First Boston. The 11 1/2%, seven-year senior notes were priced at par and are noncallable for five years. The deal was done in conjunction with a $20 million preferred stock offering, the source said.
Also Friday, Fort Howard Corp. said it has filed a registration statement with the Securities and Exchange Commission covering $500 million of senior and senior subordinated notes.
The filing breaks down to $100 million of senior unsecured notes due 2002 and $400 million of senior subordinated notes due 2006, the company said in a release.
Fort Howard will use net proceeds to redeem all of its outstanding 12 3/8% notes, to prepay some term debt under its bank credit agreement, to repay some of its revolving credit agreement debt, and to cover some fees and expenses.
Cliff Bowers, a Fort Howard spokesman, said Morgan Stanley & Co. will be the principal underwriter on the offering. No date for the offerings have been set, Bowers said.
In other news, Stone-Consolidated Corp., an indirect Canadian subsidiary of Stone Container Corp., has completed its initial public offering.
In a release Friday, Stone Container said a "significant" portion of proceeds went to repay an intercompany debt. Ira N. Stone, senior vice president of corporate marketing, said the debt was one that Stone-Consolidated owed to Stone Container.
Stone Container, a Chicago-based paper and paper packaging company, said it will use the funds to prepay its March 1994 bank amortization requirements and a majority of its bank amortization requirements due next September.
In secondary trading Friday, junk prices ended a quiet day unchanged. Spreads on high-grade issues also ended unchanged.
New Issues and Ratings
Federal Home Loan Banks issued $50 million of 5.395% notes due 1998 at par. Noncallable for two years, the notes were priced to yield 21 basis points more than comparable Treasuries. Salomon Brothers was sole manager.
In rating action Friday, Standard & Poor's Corp. upgraded Mattel Inc.'s $200 million of senior unsecured notes to BBB-plus from BBB-minus following the toy maker's roughly $1.2 billion acquisition last month of Fisher-Price Inc.
Simultaneous with the acquisition, Mattel's lenders have released the collateral on the domestic bank revolving credit, and the company has lessened its reliance on foreign bank debt that is structurally senior to the rated senior unsecured debt, Standard & Poor's said in a release.
Ratings on Mattel's $100 million of subordinated debentures were also lifted to BBB from BBB-minus. All ratings were taken off CreditWatch, where they were placed on Aug. 20.
"The purchase moderately enhances Mattel's business risk profile through an improved market position and greater product line diversity," the release says. "The acquisition of Fisher-Price, formerly the fourth largest toy maker, ties Mattel with Hasbro Inc. ... as the world's largest toy company."