AMERICAN ELECTRIC <AEP> UNIT SELLS BONDS
Columbus and Southern Ohio Electric
Co, a unit of American Electric Power Co Inc, is offering 100
mln dlrs of first mortgage bonds due 2017 priced to yield nine
pct, said lead manager Morgan Stanley and Co Inc.
    Morgan headed a syndicate that won the bonds in competitive
bidding. Daiwa Securities, Drexel Burnham and UBS Securities
are co-managers of the offering.
    Underwriters noted that UBS, acting as sole underwriter,
won a competitive bidding for 250 mln dlrs of 30-year
debentures of GTE Corp <GTE> just this morning. And Daiwa ran
the books for an offering in the U.S. earlier this month.
    The GTE deal is UBS's first this year and the fourth since
it won a competitive bidding in June 1986. Daiwa won its first
U.S. corporate debt offering in September 1986 and followed
that with the March 11 competitive win.
    The only other foreign firm to manage an offering in the
U.S. market is Nomura Securities International Inc, which won
as sole underwriter a competitive issue in December 1986.
    Morgan Stanley said it bid the Columbus and Southern Ohio
mortgage bonds at 99.609 and set a coupon of nine pct and
reoffering price of par to yield 140 basis points over the
off-the-run 9-1/4 pct Treasury bonds of 2016.
    The American Electric unit last tapped the domestic debt
market on August 21, 1986, when it issued 80 mln dlrs of
same-rated 29-year debt securities priced to yield 9-1/2 pct,
or 204 basis points over comparable Treasury securities.
    Non-refundable for five years, the 30-year first mortgage
bonds are rated Baa-2 by Moody's Investors Service Inc and BBB
by Standard and Poor's Corp.
 Reuter
