NEVER TO BE REPEATED OFFERS
Many Eurohouses turned in bigger profits in first-quarter 1986 than for the whole of 1985. But in April the markets turned sour. Of the 17 deals most commonly cited as significant underperformers, nine came to the market that month. Three were for US private corporates: Campbell Soup Company came looking for 12-year debt with a coupon of 7 1/2, leaving co-lead manager Morgan Guaranty and CSFB to carry the can as the paper traded around the 95/90% mark; Honeywell brought a 10-year, 7 7/8 bond to market, arranged by Warburg, but the paper traded at less 5 1/2, falling to 89 by late May; McDonald's Corporation announced its 10 year, zero sterling bond on April 29, but tight pricing made it unpopular and pushed the issue price of 44.75 down to 38 7/8.
Chevron's March issue is another Euromoney dog and typical of several oil company disasters, three of which came to the market in April. Dresdner Bank's 12-year 6 1/8 for Union Oil Company of California, CSFB's 10-year 7 1/4 for Petro Canada, and Morgan Guaranty/Morgan Grenfell's 7-year 10 1/8 for London and Scottish Marine, all traded well below par.