The on-the-run 30-year Treasury bond continued to cast a shadow on the long-term corporate market yesterday.

A 30-year issue for Duke Power Co. that was priced last week off the new 6 1/4% Treasury bond was freed to trade and quickly dropped in price. The spread on the Duke bond rose 12 to 15 basis points yesterday, traders said.

The Duke bond had been priced at 73 basis points over the 6 1/4% Treasury bond, but only 55 to 60 basis points over the older 7 1/8% Treasury bond.

The Duke bond's spread to the old Treasury bond is now 85 to 87 basis points. The Duke bond's spread to the new Treasury bond is now 71 to 73 basis points.

Investors continued to argue that technical supply factors were artificially lowering the yield on the new 6 1/4% Treasury bond. They said they wanted new issues priced off the older, higher yielding bond.

In late trading yesterday, the new 6 1/4% Treasury bond was yielding 6.20% while the older 7 1/8% bond was yielding 6.34%.

For investors looking for secondary market bargains, First Boston analysts recommended selecting 10-year maturity bonds issued by U.S. banks and some foreign banks in a report this week.

Spreads on bank bonds widened three to five basis points last week because of heavy new issuance volume, the analysts said.

Bonds from banks with improving credit ratings are a good value, including Citicorp, H.F. Ahmanson, and Wells Fargo, the First Boston analysts said. Bonds from Scandinavian and Swedish banks are also good buys, according to the analysts.

The analysts recommended avoiding bonds issued by Italian. French, and Japanese banks.

In the secondary market yesterday, spreads on investment grade bonds widened several basis points. A late rally in the Treasury market did little to lift prices in the quieter corporate market, traders said.

Prices on below-investment grade bonds were mixed. Bonds of Dr Pepper/Seven-Up Cos. continued to rally following the announcement last week that Cadbury Schweppes PLC would raise its equity stake in the soft drink bottler to 26% from less than 6% currently.

Dr Pepper's zero coupon bonds due in 1997 were up 5/8 to 74 1/8. The bonds rose 1/2 on Monday.

Bonds of Turner Broadcasting System Inc. were mixed, as investors are still grappling to assess the cable conglomerate's announced plan to buy New Line Cinema Corp. and Castle Rock Entertainment for $600 million.

Turner's 12% notes due in 2001 were down 5/8 to a 109 bid yesterday. But the company's longer term 8 3/8% bonds due in 2013 were up 1 1/8 to 100% bid. Monday, the 12% notes were down 1 1/2 and the 8 3/8% bonds were unchanged.

The forward calendar grew again yesterday.

The forward calendar grew again yesterday.

Portugal filed with the SEC to issue up to $1 billion in dollar-denominated bonds; Seagram Co. filed to issue $500 million in new debt; and Western Resources Inc. filed to issue $200 million.

Best Buy Co. filed to issue $125 million of bonds through Goldman, Sachs & Co. and Merrill Lynch & Co. as underwriters.

CIT Group Holdings Inc. issued $200 million of medium-term floating rate notes due 1995. The noncallable notes were priced at par with the interest rate to be reset daily at the prime rate minus 2.45%. Interest is paid quarterly. UBS Securities Inc. managed the deal.

Consolidated Natural Gas Co. issued $150 million of 5 3/4% debentures due 2003 through a competitive pricing. Salomon Brothers won the noncallable issue with a price of 98.402 and a yield of 5.965%, a spread of 37 basis points to comparable Treasuries.

Phoenix Re Corp. issued $75 million of 9 3/4% senior notes due in 2003. The notes, noncallable for five years, were priced at par to yield 9.75%, or 415 basis points more than comparable Treasuries. Dillon, Read & Co. managed the deal. The notes are rated Ba2 by Moody's Investors Service and BB-plus by Standard & Poor's Corp.

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