World Bank's $1.5 billion global issue helped bring yesterday's new debt total to $2.56 billion and a smile to the face of at least one World Bank official.

"How can you not be happy with the narrowest spread we've ever done on a public issue of this maturity in U.S. dollars," said Paul Siegelbaum, head of the bank's yen-dollar funding group.

World Bank issued $1.5 billion of 5.875% global bonds due 1997. The noncallable bonds were priced at 99.425 to yield 6.01% or 5 basis points over five-year Treasuries. Merrill Lynch & Co. and International Bank of Japan Ltd. acted as co-lead managers.

"There is a tremendous amount of demand for this type of paper, but this structure and this credit quality are getting rarer and rarer in the market," Mr. Siegelbaum said.

The offering's plain vanilla structure makes it easy to value and offers buyers good liquidity, he said. Investors look to World Bank paper as an alternative to other top quality debt such as Treasuries and federal agency issues, Mr. Siegelbaum said earlier.

But one trader said demand came from outside the United States.

"It was demand from Europe," he said, adding that the spread was too tight for U.S. investors' tastes.

Also yesterday, the Province of Saskatchewan issued $300 million of 8.50% debentures due 2022. Both those inside and outside the deal said it was a blowout. Salomon Brothers Inc. lead managed the offering.

A member of the selling syndicate outside of Salomon described it as a "brilliant issue."

"They didn't try to squeeze the buffalo off the nickel," he said.

Saskatchewan's noncallable debentures were priced at 99.841 to yield 8.515% or 90 basis points over comparable Treasuries. Moody's Investors Service rates the offering A3, while Standard & Poor's Corp. rates it BBB-plus.

Other Issues

High-grade bond prices followed Treasuries, closing the day 1/8 point higher. High-yield bonds ended firm.

Louisiana Power & Light issued $179 million of 7.74% first mortgage bonds due 2002 at par. Noncallable for five years, the bonds were priced to yield 85 basis points over 10-year Treasuries. Moody's rates the offering Baa2, while Standard & Poor's rates it BBB-plus. Kidder, Peabody & Co. lead managed the offering.

Federal Home Loan Banks issued $174 million of 4.96% notes at par. Noncallable for a year, the notes were priced to yield six basis points over comparable Treasuries. Goldman, Sachs & Co. managed the offering.

Sprint Corp. issued $150 million of 8.125% of notes due 2002. The noncallable notes were priced at 99.696 to yield 8.17%, or 125 basis points over comparable Treasuries. Moody's rates the offering Baa3, while Standard & Poor's rates it BBB-minus. Lehman Brothers lead managed the offering.

Federal Home Loan Banks issued $102 million of 6.05% notes due 1997 at par. Noncallable for a year, the notes were priced to yield 12 basis points over five-year Treasuries. Merrill Lynch managed the offering.

PHH Corp. issued $100 million of floating rate medium-term notes due 1993 at par. The noncallable notes float daily at 235 basis points under prime. Moody's rates the offering A2, while Standard & Poor's rates it A-plus. J.P. Morgan Securities Inc. sole managed the offering.

Federal Home Loan Banks issued $50 million of 4.390% notes due 1994 at par. The noncallable notes were priced flat to comparable Treasuries. Merrill Lynch managed the offering.

Yesterday's Ratings

Moody's has given a B2 rating to Grand Union Co.'s proposed $325 million senior note issue and a B3 rating to the supermarket chain's proposed $475 million senior subordinated note issue.

Those issues, together with two other privately placed classes of junior debt, will be used to refinance existing debt related to the company's July 1989 leveraged buyout, a Moody's release says. It will also be used to permit Miller, Tabak, Hirsch & Co. affiliates to keep control of GND Holdings Corp. while allowing Salomon Brothers to sell its 40.7% stake in GND Holdings.

"The rating is based on the company's high leverage, the thin interest coverage, and the moderate expected operating margin improvements in the next several years," the Moody's release says.

"The rating is also reflective of the expected positive impact of the more permanent financing structure, the fairly strong market position of its northeast and metropolitan New York divisions, and the low debt amortization requirements in the near term," the release adds.

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