The Republic of Portugal priced its $1 billion offering a day early yesterday because demand was so strong underwriters saw no reason to wait.

The 10-year global bond deal also sported the lowest coupon ever for a sovereignty on a fixed-rate dollar offering in any market, according to John McNiven, a managing director at Merrill Lynch & Co.

Merrill Lynch jointly underwrote the offering with IBJ International PLC.

The deal consisted of $1 billion of 5 3/4% noncallable global bonds. They were priced at 99.35 to yield 5.837% or 45 basis points more than comparable Treasuries. Moody's investor's Service rates the offering A1; Standard & Poor's Corp. rates it AA-minus.

McNiven attributed the offering's success to a big marketing effort and the strong story Portugal has to tell.

Portugal's deal follows last week's $5.5 billion global bond offering by the Republic of Italy, which an underwriting source earlier described as "the largest underwritten capital markets transaction of its kind in any currency."

The $2 billion 10-year piece of Italy's transaction came in at a yield of 62 basis points more than comparable Treasuries.

The impact of Portugal's offering was felt in the Treasury market, particularly with the 10-year note, which weakened as it came under hedge-related selling from Portugal's deal as well as the anticipation of building corporate supply.

Offerings expected today include Public Service Electric & Gas Co.'s $300 million deal, done through a competitive bid. The 30-year offering is expected to be noncallable for 10 years. Atlantic City Electric Co. is also expected to offer $80 million to $100 million of 30-year bonds. That deal will also be competitively bid.

In secondary trading, spreads on high-grade issues ended unchanged. High-yield prices ended in what one trader called "extremely quiet" trading. Participants are focused on the large number of new issues expected this week, he said.

"I think there's probably 15 deals this week," the trader said.

New Issues

Student Loan Marketing Association issued $600 million of floating rate notes due 1998 at par. Noncallable for a year, the notes float weekly at 19 basis points over more than the 91 -day Treasury bill rate. They pay quarterly. Merrill Lynch & Co. was lead manager of the offering.

Federal National Mortgage Association issued $300 million of 4.98% medium-term notes due 1998 at par. Noncallable for two years, the notes were priced to yield 18 basis points more than comparable Treasuries. Merrill Lynch was the sole manager.

Arizona Public Service Co. came to market with $100 million of 5.75% first mortgage bonds due 2000. The noncallable bonds were priced at 99.884 to yield 5.77% or 68 basis points more than the 83/4% Treasuries of 2000. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB. Salomon Brothers was lead manager of the offering.

New Issues

Moody's assigned a Ba3 rating to Best Buy Co.'s proposed $125 million of senior subordinated notes due 2003. The rating agency also upgraded the company's existing reset notes to Ba3 from B1.

"The upgrade reflects the success of Best Buy's retail concept; its expanded geographic locations, market shares, and product lines: and its good financial performance with generally moderate leverage," Moody's said in release.

Duff & Phelps Credit Rating Co. gave an A-plus rating to Southern California Edison Co.'s $400 million shelf registration for first and refunding mortgage bonds. The company will use proceeds to repay or retire existing debt, to finance construction, and to cover general corporate purposes.

"Southern California Edison is a well-managed utility with good cash flow and rate mechanisms that help stabilize earnings and reduce regulatory lag," Duff & Phelps said in a release. "Construction expenditures should remain relatively level and are expected to be funded largely from internal cash. A reduction in short-term debt will improve overall debt leverage as the company recovers its Palo Verde nuclear plant rate deferrals."

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