Issuers will splash more than $1.3 billion of junk on this week's market, but one portfolio manager says plentiful cash will soak it up.

"There's so much money coming in that pretty much everything gets done," said one source whose firm manages high-yield funds totaling approximately $250 million.

The source said that while many of the offerings are being priced aggressively, about $350 million of new cash is coming into high-yield funds every week.

However, he said he has no plans to purchase anything this week.

"We like what we have," he said.

Another portfolio manager also has no plans to buy.

"I haven't looked at any of the stuff because they are not names that I know well," she said. The portfolio manager added she had heard that the offerings were priced somewhat aggressively.

Kingman D. Penniman, an executive vice president at Duff & Phelps/MCM Investment Research Co., said the frenzied rush by investors to put money to work has begun to subside.

"I think they have a choice of being selective," said Penniman, adding that after this week's offerings another $8.5 billion remains on the calendar.

"Every time something goes, there's something else that takes its place," Penniman said.

According to Securities Data Co., 10 high-yield issues were priced last week for a total of nearly $1.9 billion. Continental Cablevision's three-part offering of $1 billion accounted for most of the total.

Deals on deck this week include Southern Pacific Rail's $375 million of 12-year senior notes. The notes, which are noncallable for five years, were expected to be priced last night at 9 3/8%, a source familiar with the offering said. Price talk has been 9 3/8% to 9 1/2%. Kidder, Peabody & Co. is the lead manager for the issue.

Nextel Communications is expected to offer 10-year senior discount notes with proceeds totaling $200 million through Merrill Lynch & Co. The notes are noncallable for five years.

Triangle Pacific Corp. last night was expected to issue $165 million of 10-year senior notes due 2003. The notes are noncallable for five years. Price talk was changed to 10 1/4% to 10 1/2% form 9 7/8% to 10 1/8%. Donaldson, Lufkin & Jenrette Securities Corp. will be the lead manager for the offering, which was increased from $160 million.

Other offerings expected this week:

* Keystone Group Inc. -- $145 million of 10-year senior secured notes through Merrill Lynch.

* Outdoor Systems Inc. -- $105 million of 10-year senior secured notes through lead manager Bear, Stearns & Co.

* General Chemical Corp. -- $100 million of senior subordinated notes due 2003 through lead-manager First Boston Corp.

* Carrol's Corp. -- $100 million of 10-year notes through lead manager Citicorp Securities Inc. The notes are noncallable for five years. The offering was expected to come either last night or today.

* Leucadia National -- $100 million of senior notes due 2013 through Jefferies & Co.

* American Annuity Group -- $85 million of eight-year senior notes today through lead manager Donaldson Lufkin. The notes are noncallable for five years.

In the private placement market, Brylane L.P. is expected to offer $125 million of 10-year senior subordinated notes through Merrill Lynch. The noncallable notes will be done under Rule 144A and come with rights allowing them to be publicly registered.

Few deals are seen in the high-grade market.

"The interesting thing is the absence of talk of anything coming," a portfolio manager said, noting that the yield on the Treasury's 30-year bond broke through the 6.5% level. It seems issuers are waiting for rates to drop still lower, she said.

In secondary trading, high-yield bonds were unchanged in light trading. Spreads on high-grade bonds ended a quiet day unchanged to slightly wider.

"I think it's going to be quiet all week with the [Treasury] auctions coming," one trader said.

New Issues

BankAmerica Corp. issued $150 million of subordinated floating-rate notes due 22003 at par. The rate on the notes cannot drop below a floor of 4.20%, but is not capped. They were priced to yield five basis points over the three-month London Interbank offered rate. First Boston Corp. managed the offering.

First Hawaiian Inc. issued $100 million of 6.25% subordinated notes due 2000. The noncallable notes were priced at 99.737 to yield 6.297%, or 87.5 basis points more than comparable Treasuries. Moody's Investors Service rates the offering Baa1, while Standard & Poor's Corp. rates it BBB-plus. Goldman, Sachs & Co. was the lead managed for the offering.

Ratings News

Standard & Poor's downgraded CIGNA Corp.'s senior debt to A from A-plus and subordinated debt to A-minus from A.

The rating agency removed the ratings from CreditWatch where it placed them on June 25. The action affects about $1.2 billion of debt.

Standard & Poor's affirmed CIGNA's A-1 commercial paper rating, which was not on CreditWatch.

"The downgrades reflect the strain from property/casualty operations that has affected and is expected to continue to affect overall financial results and flexibility going forward," a Standard & Poor's release says. "The ratings also reflect the organization's track record of strong business positions and increasing profitability in group life/health and group pension insurance, counterbalanced by extremely poor profitability and declining market position in [property/casualty] operations."

Fitch Investors Service upgraded Merrill Lynch's senior debt to AA from AA-minus.

"The action reflects increased credit strength due to a more stable revenue base with higher fee income, tighter expense controls despite expanding business volumes, and more tightly controlled credit and risk positions, including principal risk-taking activities," a Fitch release says.

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