Olympia & York Water Street Finance Corp. yesterday told its 55 Water Street noteholders that the New York City office building cannot generate enough cash flow to make its 1993 interest payments.

"I think bondholders will end up owning the buildign eventually," one analyst said. "And it's not the greatest building." The analyst described the structure as well-located but in the mid-tier of downtown Class A office space.

Olympia & York met yesterday with holders of both series of non-recourse notes secured by 55 Water Street, according to a release the company's public relations firm issued. Olympia & York told noteholders they must rely upon only the building and various credit support programs in place for any repayment of mortgage debt, the release said.

One series consists of $435 million of 8 1/4% notes due 1996. Annual interest payments on those notes amount to $35.88 million. The other is a zero coupon issue due 1996 and totalling about $113 million principal amount, the release says.

The analyst yesterday heard a bid of 24 for the 8 1/4% bonds, which had been trading at 37 on Monday, he said. He described the bid as low and said he expects the bonds to fall only to the low 30s.

Also yesterday, Olympia & York asked the noteholders to form a committee to negotiate with the company concerning the building's financial situation, the release says.

An Olympia & York official told noteholders that about 1.5 million square feet of space, or 40% of the building, will be available for lease by June 30, 1993, and about 650,000 additional square feet will become available by the end of 1997. Re-leasing that space could cost $100 million to $200 million or more over that five-year period, the release says.

An Olympia & York (USA) spokesman quoted in the release says the announcement reflects the "unprecedented downturn in the Manhattan office market."

About $4.8 million is currently held in the building's operating account, which is estimated will increase to over $10 million by June 30, the release says. In addition to the 55 Water St. building, the notes are supported by approximately $50 million of third party-issued credit supports. At the meeting, Olympia & York told noteholders they would need to determine how such funds would be applied to the building's obligations.

Subject to any actions noteholders may take, Olympia & York Water Street Co. will continue to manage 55 Water St. and expects to continute to supply services to the building tenants.

Olympia & York is not obligated to make payments on the notes or to make any additional investment in the property, the release says.

An Olympia & York officer at the meeting said it will cooperate with the noteholders in seeking a resolution of the building's financial difficulties, but does not inted to advance any funds to support the building's operations.

Fidelity & Guaranty Life Insurance Co. holds a tiny amount, 0.91%, of the zeros, company spokeswoman Kerie Burch-DeLuca, said.

Asked about the announcement at yesterday's meeting, she said, "We had bought them to hold them and will continue that posture."

Elsewhere, American Express Travel Related Services Co. yesterday said its American Express Receivables Financing Corp. subsidiary filed a registration statement witht he Securities and Exchange Commission for a proposed securitization of consumer charge card receivables by the subsidiary.

The transaction's size and timing are undetermined, and American Express release said. Any transaction would mean new financing for RFC.

The proposed deal would include receivables generated by a portfolio of certain American Express Card, American Express Gold Card, and Platinum Card accounts. The transaction would exclude American Express Corporate Card accounts or revolving credit receivables. Lehman Brothers will be the managing underwriter.

In secondary trading yesterday, high-grade prices moved up in line with Treasuries, which gained [unkeyable] points in the long end. The high-yield ended mixed with some better quality names showing gains.

Among yesterday's new issues] were:

Philip Morris issued $300 million of 7.625% notes due 2002. The noncallable notes were priced at 98.798 to yield 7.80% or 57 basis points over comparable Treasuries. Moody's Investors Service rates the offering A2, while Standard & Poor's Corp. rates it A. Lehman Brothers won competitive bidding to underwrite the offering.

Pennsylvania Power & Light issued a two-part first mortgage bond offering totalling $300 million. The first tranche consisted of $150 million of 7.75% bonds due 2022. The noncollable bonds were priced at 99.784 to yield 7.77%, or 55 basis points over comparable Treasuries. The second part consisted of $150 million of 8.5% bonds due 2022. Noncallable for 10 years, the bonds were priced at 99.784 to yield 8.52%, or 74 basis points over comparable Treasuries. Moody's rates the offering A2, while Standard & Poor's rates it A. First Boston Corp. lead managed the offering.

Bank of New York issued $200 million of 4.2% bank notes due 1993. The noncallable notes were priced initially at par. Moody's rates the offering A1, while Standard & Poor's rates it A. First Boston Corp. managed the offering.

Alabama Power issued $200 million of 8.50% first mortgage bonds due 2022. Nonrefundable for five years, the bonds were priced to yield 99.375 to yield 8.55%, or 78 basis points over comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A. Kidder, Peabody & Co. Managed the offering.

Merrill Lynch & Co. issued $150 million of 8% senior notes due 2007. The noncallable notes were priced at 98.125 to yield 8.22%, or 99 basis points over 10-year Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A-plus. Merrill Lynch managed the offering.

The Limited issued $150 million of 7.80% notes due 2002. The noncallable notes were priced at 99.86 to yield 7.82%, or 60 basis points over comparable Treasuries. Moody's rates the offering A1, while Standard & Poor's rates it A. Goldman, Sachs & Co. lead managed the offering.

Worldcorp Inc. issued $65 million of 7% convertible subordinated debentures due 2004 at par. Nocallable for three years, the bonds convert into common stock at $11.06 a share, a 18% conversion premium. National Westminster Bank managed the offering.

USX Corp. issue $150 million of 9.375% debentures due 2022. The noncallable debentures were priced at 99.375 to yield 9.43%, or 167 basis points over comparable Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB-minus. Salomon Brothers lead managed the offering.

Late Monday, Royal Caribbean Cruises Ltd. issued $126 million of 11.37% senior subordinated notes due 2002. The notes are callable after five years at 104.95, moving to par in 1999. They were priced at 99.26 to yield 11.50%, or 425 basis points over comparable Treasuries. Moody's rates the offering Ba3, while Standard & Poor's rates it BB-minus. Merrill Lynch & Co. managed the offering.

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