A $1 billion offering from U S West Communications Inc. helped vault yesterday's new issue total past $3.5 billion.

Buy-side sources said the deal "blew out."

Jim Ho, a senior vice president at Boston-based John Hancock Mutual Funds, described U S West as a high-quality name that came at "a fairly good" price.

"And there's still money out there that needs to be put to work," he said.

Mark Grant, an executive vice president at Rodman & Renshaw Capital Group Inc., also thought U S West's pricing was on target. "I think it's about in-line," Grant said.

He also thought that the State of Israel's $1 billion, four-tranche deal launched yesterday through lead manager Salomon Brothers also seemed to be garnering good demand.

That deal is expected to be priced today, a Salomon Brothers spokeswoman said.

While big supply looms, Grant thinks plenty of money will be available in the next 30 to 60 days to absorb it. Issuers, however, may have to widen spreads a bit to get deals done, he said.

That money is coming from mortgage prepayments, calls in the corporate bond market and, in the public sector, municipal bond refunding, Grant said.

According to Blair Johnson, a U S West spokesman, the company will use proceeds from the offering to call existing debt.

"We just had an opportunity to do a large-sized package, and the market was right," Johnson said when asked why the company decided to issue yesterday.

U S West issued $1 billion of debentures due Sept. 15, 2033. Noncallable for 10 years, the debentures were priced at 96.052 to yield 7.176% or 94 basis points more than the old, 30-year Treasuries. Lehman Brothers was lead manager. Moody's Investors Service rates the offering Aa3, while Standard & Poor's Corp. rates it AA-minus.

The offering comes from a $2 billion shelf registration that the company filed in July, Johnson said.

In secondary trading, high-yield bonds ended unchanged, while spreads on high-grade issues ended wider.

New Issues

Texas Utilities issued a three-part offering yesterday totaling $550 million.

The company issued $300 million of 7 3/8% first mortgage bonds due 2025. Noncallable for 10 years, the bonds were priced at 99.33 to yield 7.43% or 119 basis points more than the old 30-year Treasury. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB. Goldman Sachs & Co. was lead manager of the offering.

Texas Utilities issued $125 million of 5.5% first mortgage bonds due 1998 at par. The noncallable bonds were priced to yield 70 basis points over when-issued five-year Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB. Merrill Lynch & Co. was lead manager of the offering.

Texas Utilities issued $125 million of 6 1/4% first mortgage bonds due 2004 at par. The noncallable bonds were priced to yield 83 basis points over the 5 3/4% Treasuries of 2003. Merrill Lynch was lead manager.

Consumers Power Co. issued a two-part offering totaling $600 million. The first tranche consisted of $300 million of 6 3/8% first mortgage bonds due 2003. Noncallable for five years, the bonds were priced at 99.205 to yield 6.484% or 105 basis points more than 10-year Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB. Goldman Sachs was lead manager.

The second tranche consisted of $300 million of 7.375% first mortgage bonds due 2023. Noncallable for 10 years, the bonds were priced at 97.582 to yield 7.585% or 133 basis points over comparable Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB. Morgan Stanley & Co. was lead manager.

Public Service Electric & Gas Co. issued $300 million of 7% first mortgage bonds due 2024. Noncallable for 10 years, the bonds were priced at 98.472 to yield 7.122% or 87 basis points more than comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A. Goldman Sachs was lead manager of the offering.

Texas-New Mexico Power reportedly issued a two-part offering totaling $240 million. The first tranche consisted of $100 million of 9.25% first mortgage bonds due 2000 at par. The noncallable bonds were rated Ba3 by Moody's and BB by Standard & Poor's. The second piece consisted of $140 million of 10.75% secured debentures due 2003 at par. Noncallable for seven years, the debentures were rated B1 by Moody's and B-plus by Standard & Poor's. Dillon Read & Co. was lead manager.

Joy Technologies issued $200 million of 10.25% senior unsecured notes due 2003 at par. Noncallable for five years, the notes were rated B1 by Moody's and B by Standard & Poor's Corp. Morgan Stanley was lead manager of the offering.

Federal National Mortgage Association issued $150 million of constant maturity Treasury linked notes due Oct. 2, 1998. In the event that the five-year CMT is greater than or equal to 7.75% 10 days prior to Oct. 2, 1998, the maturity is switched to Oct. 2, 2003. The 5.49% notes were priced to yield 67 basis points over when issued five-year Treasuries. Merrill Lynch was sole manager of the offering.

New England Telephone & Telegraph Co. issued $250 million of 6 7/8% debentures due 2023. Noncallable for 10 years, the debentures were priced at 98.624 to yield 6.985% or 73 basis points over comparable Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA-minus. CS First Boston won competitive bidding to underwrite the offering.

New England Telephone & Telegraph Co. issued $100 million of 5.05% debentures due 1998. The noncallable debentures were priced at 99.781 to yield 5.1% or 28 basis points over comparable Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA-minus. A group led by Goldman Sachs won competitive bidding to underwrite the offering.

Atlantic City Electric Co. issued $75 million of 7% first mortgage bonds due 2023. Noncallable for 10 years, the bonds were priced at 98.75 to yield 7.101% or 84 basis points more than comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A. Kidder, Peabody & Co. won competitive bidding to underwrite the offering.

Northern States Power Wisconsin issued $40 million of 5.75% first mortgage bonds due 2003. The noncallable bonds were priced at 99.476 to yield 40 basis points more than comparable Treasuries. Moody's rates the offering Aa2, while Standard & Poor's rates it AA. Kidder Peabody managed the offering.

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