Campeau to Scale Back Bond Offer to $750 Million

Associated Press

Campeau Corp. said Monday that it was reducing the amount of “junk bonds” it would try to sell to help finance the company’s acquisition of Federated Department Stores Inc.

In a registration statement with the Securities and Exchange Commission, Toronto-based Campeau said it would offer $750 million of high-risk, high-yield bonds. That is down from the $1.15 billion in junk bonds the company had planned to offer before it announced last week that it was postponing the bond issue and considering restructuring it.

The remaining $400 million in financing would be obtained through the private placement of notes with institutional investors, Campeau said.

A source close to the situation said last week that the bonds were not put up for sale as planned because of investor uncertainty over junk bonds.


Bridge Loan Payment

Bond traders were concerned about multibillion-dollar buyout bids--including those for RJR Nabisco Inc. and Kraft Inc.--and trading in corporate bonds was at a near standstill last week.

Of the bonds provided for in Monday’s registration statement, $500 million are due in 2000 and $250 million are in 2004.

They supersede a planned offering of $300 million in notes due in 1994, $300 million in notes with extendable due dates and $550 million in debentures due in 2000.


Proceeds of the issue are intended to pay off bridge financing supplied by First Boston, Paine Webber Inc. and Dillon, Read & Co.

Campeau paid nearly $6.71 billion for the Federated shares, but the total cost of the takeover was estimated at $8.8 billion.