Time Warner borrowed another $ 1 billion in debt in the capital markets yesterday, making it the biggest corporate borrower in the public markets so far this year.The debt-laden media giant issued 30-year bonds carrying an interest rate of 9.15%. Unfortunately, according to Wall Street sources, institutional investors seemed to have had their fill of TW debt and the issue didn’t sell off well. Merrill Lynch; Bear, Stearns; and Wertheim Schroder were the lead underwriters. “The paper just wasn’t very well received,” said a bond salesperson at a leading investment bank. One reason, the source said, was there’s simply an oversupply of TW paper in the market. The company has borrowed another $ 2 billion over the past month through three other bond issues: five-year notes, seven-year notes and 20-year notes. Much of that paper, said the source, has yet to be absorbed by the universe of pension funds, mutual funds, money management funds and other institutional investors who buy bonds. Another stumbling block to yesterday’s issue was that the bond market rally stumbled, with weak demand for a two-year debt issued by the U.S. Treasury. Those government issues usually set the pace of the market. TW has been selling debt to raise funds to repurchase its Series D preferred stock, which carries a coupon of 11%. Last week, the company said it would spend $ 2.5 billion to buy back 45 million D shares. Proceeds from yesterday’s financing, the company said, will be used to redeem the remaining 20 million D shares. By restructuring its balance sheet, however, the company will be creating additional cash flow — about $ 90 million more annually — by redeeming series B alone. The performance of TW’s issue yesterday was also hampered by a split debt rating, rated Ba2, a high grade of junk bonds, by Moody’s Investors Service; and BBB-, or low investment grade, by Standard & Poor’s. Time Warner shares closed yesterday off 50 cents to $ 31.88.