Pacific Gas and Electric Co. yesterday launched a $700 million offering expected to be priced as early as Monday.

"We expect something next week, but that's as far as I can go," said Tony Ledwell, a Pacific Gas and Electric spokesman.

Ledwell said the company's board in January authorized "a number of bond offerings," which Pacific Gas and Electric expects to complete "throughout the year at various times."

He declined to say how much those prospective offerings would total.

According to market sources, the first tranche of the $700 million two-part offering is expected to consist of $350 million of a 12-year bullet maturity.

The second piece is expected to be $350 million maturing in 35 years. It will be noncallable for 10 years.

First Boston Corp. was said to be underwriting the offering.

Other prospective deals looming on the horizon include global offerings by the Republic of Italy and the Republic of Portugal. Italy's deal is expected to total up to $5 billion, while Portugal's is expected to total $1 billion.

New-issue activity yesterday saw more than $2 billion of corporate and agency debt priced, with Ford Mator Credit's $500 million medium-term note the biggest deal priced.

In secondary trading, high-grade corporate issues lost about a point in sympathy with the 1 1/4 point decline by Treasuries.

"We tightened up a little bit today," one trader said.

Strong economic news, fear that the U.S. may tax foreign investors, and profit-taking triggered the Treasury market sell-off. Junk bonds were quiet and unchanged.

In other news yesterday, Chemical banking Corp. unveiled realignment plans for several businesses within Chemical's Global Bank unit. The realignment is "designed to more sharply focus the corporation's capital markets and corporate finance resources on the needs of its customers," Chemical said in a release.

"These changes arise from the increasing number of opportunities available for providing expert corporate finance advice to a wide variety of clients, coupled with the expanded product capability we now have through our newly obtained Section 20 debt powers," William B. Harrison Jr., Chemical's vice chairman, said in the release.

According to Chemical spokesman John Meyers, Chemical had a limited ability to deal in debt securities until late May, when the Federal Reserve gave it the green light to deal in all types of debt.

The changes call for formation of a new Emerging Markets Corporate Finance division within the bank's Developing Markets Group. The new division will focus on emerging markets privatizations, project finance, multinational corporation advisory, and structured trade finance.

Also within the Developing Markets Group, Chemical will form an Emerging Markets Capital Markets Division, also a new group. The division will concentrate on emerging markets fund-raising, trading, and distribution.

Chemical also announced formation of a new unit focused on corporate finance advisory and capital market services for U.S. financial institutions. It will include financial and strategic advisory, mergers and acquisitions, capital markets financings, and credit and risk management products.

The new unit will include Chemical Banking Corp.'s holding company's corporate finance department and the financial institution's business of the banking and corporate finance group's multinational banking division.

New issues

Ford Motor Credit issued $500 million of floating rate medium-term notes due 1998 at par. Noncallable for two years, the notes float quarterly at 35 basis points over the three-month London Interbank Offered Rate. They pay quarterly. Moody's Investors Service rates the offering A2, while Standard & Poor's Corp. rates it A. Merrill Lynch & Co. was sole manager on the offering.

Nationsbank Corp. issued $300 million of five-year 5 1/8% senior notes due 1998. The notes were priced to yield 5.175% or 50 basis points more than comparable Treasuries. Nationsbanc Capital Markets Inc. was lead manager for the offering. Duff & Phelps Credit Rating Co. rates the offering A.

Bank of Montreal issued $300 million of 6.10% subordinated notes due 2005. The noncallable notes were priced at 99.75 to yield 6.13% or 83 basis points over 10-year Treasuries. The notes, which were unrated by Moody's, were rated A-plus by Standard & Poor's.

Federal National Mortgage Association issued $250 million of 4.90% medium-term notes due 1998 at par. Noncallable for a year, the notes were priced to yield 19 basis points over comparable Treasuries. Salomon Brothers Inc. was lead manager.

Loral Corp. issued $200 million of 7% debentures due 2023. The noncallable bonds were priced at 98.764 to yield 7.10% or 100 basis points more than comparable Treasuries. Moody's rates the offering Baal, while Standard & Poor's rates it BBB-plus. Lehman Brothers was lead manager for the offering.

Federal Home Loan Mortgage Corp. issued $200 million of 4.20% notes due 1996 and priced initially at par. The noncallable notes were priced to yield 10 basis points over three-year Treasuries. Goldman, Sachs & Co. was sole manager.

Federal Home Loan Banks issued $200 million of 3.84% notes due 1995 at par. Noncallable for a year, the notes were priced to yield one basis point over comparable Treasuries. Morgan Stanley & Co. was sole manager.

Merrill Lynch & Co. issued $100 million of floating rate notes due 1994 at par. The noncallable notes float daily at 260 basis points under the prime rate. They pay quarterly. Moody's rates the offering A1, while Standard & Poor's, rates it A-plus. Merrill Lynch was sole manager.

Rating News

Standard & Poor's upgraded Unisys Corp.'s and Unisys Finance Corp.'s senior debt to BB-minus from B-plus. The rating agency also raised Unisys Corp.'s subordinated debt to B from B-minus. Standard & Poor's removed the ratings from CreditWatch, where they were placed on June 28.

Unisys Corp.'s CC preferred stock rating, which was not on CreditWatch, was affirmed.

Total debt is roughly $2.2 billion.

"Unisys' upgrade reflects its sustained return to profitability and reduced debt burden," Standard & Poor's said in a release. "Unisys' rating also reflects a high degree of business risk associated with its declining revenue base in mainframes, maintenance, and defense products ... and the strategic shift to the faster-growing but highly competitive client server and services and systems integration segments."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.