October proved the cruelest month for high-yield bonds, handing that market its first negative return in 24 months, according to First Boston Corp.

But even with its negative 1.04% return, the high-yield market managed to outperform the Treasury market last month, the firm's monthly high-yield update due out Wednesday says.

Bob Kricheff, First Boston's director of research, noted Friday that despite the market's October troubles, it had picked up by the end of last week.

While uncertainty over the economy and the presidential election were already evident by September's end, over $7 billion of expected new issues and more than $1 billion of redemptions hitting mutual funds put a damper on demand in October, according to Kricheff.

Despite the large calendar, only $4.3 billion of new issues came to market last month, with some issuers electing to postpone deals until market conditions improved. Still, expectations of that large supply "kind of spooked" the market, Kricheff said.

The report says some $3.3 billion of debt retirements helped to partially offset the new supply last month.

New issues year-to-date total a record $40.5 billion, out-distancing the $34.2 billion record set in 1986, the report says. In the same period, net debt retirements totaled $35 billion, translating into actual growth of $4.5 billion in the high-yield market's size.

So even though new-issue volume have had a record year, the high-yield market really has not grown that much, Kricheff said.

Elsewhere in the high-yield market, Synthetic Industries' $150 million of 12-year senior subordinated debentures offering is expected this week, a source familiar with deal said.

The offering is noncallable for five years and has a sinking fund. Price talk is 11 1/2% to 11 3/4%. Moody's Investors Service rates the offering B3, while Standard & Poor's Corp. rates it B-minus. Merrill Lynch & Co. is sole managing the offering, she said.

In the global bond market, a Merrill Lynch spokeswoman confirmed plans for a $1 billion global offering by the Republic of Finland. She was unable to provide a maturity on the offering.

A source at another firm said Merrill Lynch, J.P. Morgan Securities, and Nomura International will be lead managers and bookrunners.

The Marcade Group Inc. Friday said it and its inactive subsidiary, Marlene Industries Corp., have filed a reorganization plan in the voluntary Chapter 11 case it started the previous week.

Marcade's key constituents, except for senior lender Heller Financial Inc., agree in principle on the plan, a Marcade release says.

Because the plan provides for full payment of Heller's allowed claim, Marcade plans to ask the court to approve it with or without Heller's support. Marcade's operating subsidiaries are not included in the bankruptcy filing, the release says.

The company's plan includes a $7.5 million investment by entities linked to Apollo Advisors L.P. Those entities would then own about 50% of Marcade's common stock on a fully diluted basts plus a Marcade note. Apollo holds about 77% or Marcade's senior subordinated debt. The Apollo investment hinges on the reorganization plan's consummation.

In secondary activity Friday, investment-grade bonds ended lower but fared better than the government market. High-yield bonds ended firm, quiet, and 1/4 point higher, traders said.

New issues

Triton Energy issued $240 million face amount of senior subordinated discount notes due 1997. The zero coupon notes were priced at 54.76 to yield 12.50%. The notes are callable immediately at a make-whole premium. Moody's rates the offering B1. While Standard & Poor's rates it B-plus. Merrill Lynch & Co. lead managed the offering.

General Electric Capital Corp. issued $200 million of 5.25% notes due 1995. The noncallable notes were priced at 99.755% to yield 5.34%, or 32 basis points over when-issued three-year Treasuries. Moody's and Standard & Poor's rate the offering AAA. Kidder, Peabody & Co. managed the offering.

Eli Lilly issued $100 million of 6.75% notes due 1999. The noncallable notes were priced at 99.713 to yield 6.802%, or 33 basis points over comparable Treasuries. Moody's and Standard & Poor's rates the offering AAA. Morgan Stanley & Co. managed the offering.

Late Thursday, MAFCO Inc. issued $85 million of 11.875% senior subordinated notes due 2002. The notes were priced at 99.28 to yield 12%. They are callable after five years at 105.937 moving to par in 2000. Moody's rates the offering B3, while Standard & Poor's rates it B. Bear, Stearns & Co. lead managed the offering.

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