Ralphs Grocery plans to sell $400 million...

Ralphs Grocery plans to sell $400 million in high-risk, high-yield “junk” bonds as part of the financing for a spin out to a separate Campeau Corp. subsidiary. Ralphs was recently bought by Campeau as part of its purchase of Federated Department Stores. In a prospectus detailing the bond offering, it was disclosed that 92.5% of the separate company will be owned by Campeau, with the rest held by Edward J. DeBartolo, an Ohio shopping center developer who is also a partner of Campeau in several other ventures. Proceeds from the bond sale will help repay a $900-million promissory note issued to Federated by Ralphs in connection with the Campeau deal.