950829

Corporate bonds

end slightly up

NEW YORK: U.S. high-grade corporate bonds closed slightly higher in line with U.S. Treasuries, with little activity in most areas, high-grades traders said on Monday.

Much interest was focused on Chemical Bank and Chase Manhattan Bank, but while both were well bid, little was offered, traders said.

Spreads on both Chemical and Chase 10-year paper tightened back to a bid of 75 basis points over comparable U.S. Treasuries with an offer of 70 to 72 basis points over Treasuries, traders said.

Spreads on most other issues were unchanged.

The trend in the new issue market of finance companies issuing small amounts of debt, while straight corporate were absent continued today.

Dai-Ichi Kangyo Bank affiliate CIT Group Holdings priced $100 million in non-callable notes due September 1, 1998, lead manager Salomon Brothers said.

The issue has a coupon of 6.125 percent and was priced at 99.878 to yield 6.17 percent, or 22 basis points over comparable U.S. Treasuries.

The issue is rated Aa3 by Moody's Investor Service Inc and A-plus by Standard & Poors Corp.

International Business Machines Corp bonds were largely unaffected by a Moody's upgrade of its senior debt to A1 from A3, high-grade bond traders said.

"The market had already discounted this, IBM paper has been trading for the past few weeks at spreads indicative of a high single-A rated company, said one high-grades trader.

IBM five-year notes are trading at spreads of between 38 and 40 basis points over comparable U.S. Treasuries while the company's seven-year notes are trading at about 45 basis points over comparable Treasuries, traders said. Junk-bond prices ended the day unchanged, traders said.

A few junk bond issues had moderate gains today, including SHL Systemhouse, Dominick's, Bruno's and American Standard, high-yield traders said.

In the governments market the 30-year long-bond closed up 1/8 at 102-7/32 to yield 6.7 percent.-Reuter