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Corporate bonds lower

NEW YORK: US high-grade corporate bond end lower on Thursday tracking US Treasuries, while spreads on cable companies widened, dealers said.

Spreads to US Treasuries were mostly unchanged across the board. However, cable sector spreads were seen wider. "Cables are definitely under pressure....all the bids have been pulled on Time Warner paper," one trader said.

TCI Communications 8.0 percent paper due 2005 widened by about 25 basis points to 145 basis points over Treasuries, traders said.

Spreads on TCI paper opened 10 basis points wider Thursday following an analyst's report and was exacerbated further by S&P's rating action, traders said.

Earlier Thursday, Standard a Poor's affirmed TCI Communications debt but revised their outlook to negative citing the company's higher-than-expected debt usage relative to expected cash flow generation.

"When Treasuries sold off we sold off....we've seen some flow coming from both buyers and sellers in the market, however, but the focus seems to be on cable companies," another trader said.

Meanwhile, spreads on RJR Nabisco paper were unchanged, traders said. RJR's 9.25 percent paper due 2013 tightened an additional five basis points Wednesday after narrowing about 25 points Tuesday, traders said.

News Tuesday, that the company's shareholders had re-elected the 10-member board of directors, thereby defeating Bennett Lebow's bid to take control over the company, caused spread to narrow over a two-day period.

Overall, Junk prices were off by an eight to a quarter point in quiet afternoon trade, high-yield traders said.

Kmart Corp paper was unchanged, traders said, despite earlier news that rating agency, Duff & Phelps, might cut the company's long-term senior unsecured debt rating, which is currently rated double-B.

The agency said the action was based on a proposed new $3.7 billion three-year bank facility for Kmart, which subordinates the rated debt issue. The lenders will get a first-priority lien on material unencumbered assets of Kmart and its domestic units, including inventory, receivables and owned real estate, the agency said.

In the casino sector, Trump 11.75 percent paper was bid up at 101-3/8 and offered at 101-5/8, while Coasts Hotel 13.0 percent paper was bid higher at 102, traders said.

Penn Traffic 11.5 percent 10-year paper was bid higher at 100-7/8 following its initial pricing at par, late Wednesday, dealer said.

On Thursday, no new junk issues have priced in the primary market, syndicate sources said.

In the government market, the benchmark US 30-year bond is off 8/32 at 89-14/32 to yield 6.88 percent.-Reuter