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Corporate bonds end

lower in quiet day

NEW YORK: US high-grade corporate bond prices had a relatively quiet day ending lower with US Treasuries in a day that saw corporate paper trade in a tight range on weak secondary trading, traders said on Thursday.

Spreads on most issues were unchanged, traders said. "Secondary trading was pretty weak today with most people taking a wait and see approach before tommorrow's Consumer Price index and Retail Sales figures," one high grades trader said.

Traders expect some opportunist banks and finance company issuance next week if Friday's numbers are bond-friendly.

Bank and finance paper tightened by one or two basis points today, traders said.

In the junk bond markets prices closed an eighth to a quarter lower on moderate trading, dealers said.

Dictaphone, which issued notes Wednesday, freed to trade and bid up to 100.375 with a 100.625 offer, junk-traders said.

In new issues volume was relatively light but interesting. In high-grades Petronas Dagang, a Malaysian utility, issued a $1.0 billion 144A private placement while the junk market saw Bruno's Inc struggle with and pull a zero coupon tranche before issuing $400 million in cash-pay notes.

The Petronas deal, via lead manager CS First Boston, is structured as $375 million of notes due August 15, 2005, and $625 million of notes due August 15, 2015, a source familiar with the deal said.

The 10 year notes have a 7.125 percent coupon and priced at 99.464 to yield 7.201 percent or 69 basis points over comparable US Treasuries, the source said.

The 20 year have a 7.75 percent coupon and priced at 99.267 to yield 7.823 percent, 86 basis points over comparable US Treasuries, the source added. The deal launched at $750 million and priced on the low end of price talk.

Bruno's issued $400 million in senior subordinated notes due August 1, 2005, said lead manager BT Securities Corp.

The notes are non-callable for five years and have a 10.50 percent coupon. They priced at par to yield 400 basis points over comparable US Treasuries.

The deal initially totalled $350 million and included $100 million of senior discount notes. That part of the deal was pulled due to lack of market appetite, according to market sources.

The notes are rated B3 by Moody's Investors Service Inc and B-minus by Standard & Poor's Corp.

In other new issues Premier Parks issued a $90 million 144A private placement via lead manager Chemical Bank, a source familiar with the deal said.

In the governments market the 30-year long bond had a choppy day closing down 13/32 at 108-13/32 to yield 6.89 percent.-Reuter