950809

Corporate bonds

end slightly up

NEW YORK: US high-grade corporate bonds closed the day slightly higher, tracking the US Treasury market as it fluctuated in the wake of its quarterly refunding, high-grades traders said on Tuesday.

Spreads closed firm against Treasuries.

"The (Treasury) market was a little volatile," said one high-grades trader.

"The new pricings, Southern New England Telecommunications Corp issued $300 million in notes in a two-part deal, said lead manager Lehman Brothers.

The first tranche is for $100 million with a due date of August 15, 2000. It has a 6.50 percent coupon and was priced at 99.775 to yield 6.553 or 38 basis points over comparable US Treauries.

The second tranche is for $200 million with a due date of August 15, 2005. It has a 7.00 percent coupon and was priced at 99.927 to yield 7.01 percent or 55 basis points over comparable US Treasuries.

Both tranches are non-callable for life, and are rated A1 by Moody's Investors Service Inc and A-plus by Standard & Poor's Corp.

Prices in the junk bonds market closed up an eighth to a quarter point higher, high-yields traders said.

"There was very heavy volume and a lot trading," said one junk bonds trader. "People but their money to work."

The trader said Bruno's Inc will price later this week in a two-part deal. The company will issue 1250 million in senior subordinated notes due 2005. Price talk is 375 to 400 basis points over comparable US Treasuries.

The company will also issue $100 million of (proceeds) senior subordinated discount notes due 2007. Price talk is 437.5 to 462.5 basis points.

Both tranches are non-callable for five years.

The benchmark 30-year Treasury bond closed up 1/32 at 109-08/32 to yield 6.89 percent.-Reuter