The Province of Ontario plains to offer $1.5 billion of U.S. dollar global bonds, a province official said yesterday.

Ontario will price the seven-year issue "when market conditions are right, but sooner rather than later." the official, Ron Otsuki, said.

The offering will follow the $1.5 billion of Canadian dollar global bonds Ontario sold in March.

The province chose a dollar-denominated offering this time because of "very broad market demand in Europe, the [United States], and the Far East," Otsuki said.

The seven-year maturity appealed to Ontario because it has little other debt coming due in 2000, he said. Proceeds from the offering will be used for general corporate purposes, Otsuki said.

Joint lead managers on the offering are Goldman, Sachs & Co., Salomon Brothers Inc., and Scotia McLeod Ltd.

In other news yesterday, Time Warner Inc. announced plans to offer $2 billion principal amount of liquid yield option notes due 2013 through Merrill Lynch & Co.

In a press release, Time Warner said it had filed a preliminary prospectus supplement for the notes, which are convertible at the holder's option into Time Warner common stock.

The company plans to use an expected $750 million of profits along with available cash and equivalents to redeem roughly the same amount of its 8 3/4% convertible subordinated debentures due 2015.

Merrill Lynch has a 30-day option to buy up to an additional 15% of the LYONs.

The zero coupon note offering will mark the first takedown from the shelf registration Time Warner filed in February.

The conversion rate will equal an initial conversion price of $48 a share of common stock, slightly above the conversion price of the 8 3/4% debentures being redeemed.

Holders can put any LYON to the company on the fifth, 10th, and 15th anniversary of the issue. The company will be able to fulfill its obligation by paying cash or issuing common stock valued at its then market value or in any combination. Time Warner can call the LYONs after the offering's fifth anniversary.

Elsewhere, the Penn Central Corp. said it will redeem on July 30 all of its outstanding 11% subordinated debentures due Dec. 15, 1997, at 100% of principal amount plus accrued and unpaid interest to the redemption date, according to a company release.

Roughly $133.3 million principal amount of the debentures are outstanding. Penn Central will use cash and proceeds from the liquidation of some temporary investments to fund the redemption.

In secondary trading yesterday, high-yield bonds ended a sleepy day up 1/4 point. Spreads on high-grade bonds were mostly unchanged in quiet trading.

New issues

Pacific Bell Telephone issued $350 million of 7.375% debentures due 2025. Noncallable for 10 years, the bonds were priced at 98.797 to yield 7.474%, or 66 basis points over comparable Treasuries. Moody's Investors Service rates the offering Aa3, while Standard & Poor's Corp. rates it AA-minus. Duff & Phelps Credit Rating Co. rates it AA. Goldman Sachs was the lead manager for the offering.

Federal National Mortgage Association issued $250 million of 6.38% medium-term notes due 2003 at par. Noncallable for three years. the notes were priced to yield 45 basis points over comparable Treasuries. Prudential Securities was the sole manager.

Georgia-Pacific Corp. issued $250 million of 8.125% debentures due 2023. Noncallable for 10 years, the debentures were priced at 98.626 to yield 8.249%, or 145 basis points over comparable Treasuries. Moody's rates the offering Baa3, while Standard & Poor's and Duff & Phelps rate it BBB-minus. Goldman Sachs was the lead manager.

PaineWebber Group Inc. issued $200 million of 6.25% senior notes due 1998. The noncallable notes were priced at 99.665 to yield 6.329%, or 115 basis points over comparable Treasuries. Moody's rates the offering A3, while Standard & Poor's rates it AA-minus. PaineWebber was the sole manager.

Union Bank of Finland issued $200 million of 5.25% notes due 1996. The noncallable notes were priced at 99.74 to yield 5.345%, or 90 basis points over comparable Treasuries. Moody's rates the offering A3, while Standard & Poor's rates it BBB. First Boston Corp. was the lead manager.

Duquesne Light issued a two-part offering of first collateral trust bonds totaling $200 million. The first tranche consisted of $100 million of 6.625% bonds due 2004. The bonds were priced at 99.024 to yield 6.754%, or 83 basis points over comparable Treasuries. The bonds are callable at a premium after five years, moving to par in the seventh year.

The second piece consisted of $100 million of 7.55% bonds due 2025. The bonds were priced at 99.398 to yield 7.685%, or 88 basis points over comparable Treasuries. Moody's rates the offering Baal, while Standard & Poor's rates it BBB-plus and Duff & Phelps rates it A-minus. Merrill Lynch was the lead manager.

Great Western Financial issued $150 million of 6.125% senior notes due 1998. The noncallable notes were priced at 99.68 to yield 6.20%, or 105 basis points over comparable Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB-plus. Merrill Lynch was the lead manager.

Duke Power Co. issued $150 million of 5.875% first mortgage bonds due 2001. The noncallable bonds were priced at 98.92 to yield 6.048%, or 50 basis points over seven-year Treasuries. Moody's rates the offering Aa2, while Standard & Poor's and Duff & Phelps rate it AA-minus. Fitch rates the offering AA. Merrill Lynch won competitive bidding to underwrite the offering.

Kentucky Utilities issued a two-part first mortgage bond offering totaling $123.5 million. The first tranche consisted of $61.5 million of 5.950% bonds due 2000 at par. The noncallable bonds were priced to yield 40 basis points over comparable Treasuries.

The second tranche consisted of $62 million of 6.320% bonds due 2003 at par. The noncallable bonds were priced to yield 6.32%, or 40 basis points over comparable Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA-minus. Duff & Phelps rates it AA. Goldman Sachs was the lead manager.

Rating News

Moody's is reviewing the long- and short-term ratings of Eastman Kodak Co. and its rated subsidiaries for a possible upgrade.

"The ratings review was triggered by Kodak's announcement [yesterday] that it plans to spin off its wholly-owned industrial chemicals subsidiary to its shareholders, with the expectation that the resulting company, to be known as Eastman Chemical Company Inc., will be leveraged for the purpose of making a special payment to Kodak, which will use the proceeds to pay down its own debt," a Moody's release says.

Ratings being reviewed are: Eastman Kodak Co.'s A3 senior debt, (P)A3 shelf registration, Baal subordinated debt, and Prime-2 short-term debt; Eastman Kodak International Finance's Prime-2 guaranteed short-term debt; and Industria Fotografica Interamericana's guaranteed senior debt at A3.

"In its review, Moody's will focus on the impact of the planned spinoff on Kodak's operating results and debtholder-protection measurements, including its leverage and fixed charge coverages," the release says.

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