New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-03-03
BIG BOND TRANSACTION.
AUTHORIZED BY DIRECTORS OF LAKE
SHORE AND MICHIGAN SOUTHERN.
A MORTGAGE TO SECURE $50 900 icorEAR 81
PER CENT GOLD BoNDs-THE ENTIRE
ISSUE TAKEN PY sPEYER CO.
STATEMENT BY THE LATTER.


STATEMENT BY THE LATTER.
The largest single transaction ever MADE IN
American railroad bonds was closed yesterday
when the Board Of Directors OF the Lake Shore
and Michigan Southern Railway Company au-
thorized a mortgage to secure SJo,ooo'on lVo-
year 3is per cent gold bonds. and accepted an
offer from Speyer & Co. to take the entire issue
Th. price TO be paid by speyer & Co. for the
bonds was not stated.
The purpose OF the issue Is to refund the entire
bonded debt OF the company. which now bears
per cent interest Speyer g. Co. made the foi-
lowing statement in regard to the matter:
The Lake Shore and Michigan Southern Ralway
Company has decided TO perfect now US ar aItsd
debt the ongest issue OF which maturss , from
l. 1903 and in this connection We nave pousht
si. Der cent ioo-year gold bonds. which issue II
limited t5oooo and which. upon nn,s he eancfis ara.
lien upon all the property OF The COMPANY u,,,,ed
As soon as possible we snail 0mer honds The priv
bo5ds Of the new issue The existing bonds will be
annum in payment Of the new bonds Wn,cn We
The unquestionable conservatism OF the MANAGE
ment OF the Lake Shore and Michigan Soutnsrn
Railway Company and the fact that the Interest
charge as it will be upon the retirement OF the ex-
istlng bonds. will amount 20 less than one-thIJa % oa
the present net earnings OF the COMPANY P,a,Ss Ss
those bonds almost In the same category, with tne
best state and municipal securities M whicn na nov nov
upon the investment. ,, ,...
The new Lake shore and Michigan SO s9utneTn tnTi
a. oa and nteres will yield the holders zoe a99IJ
bonds will be exchanged very rapidly for the new
6onds In act we hs, 9Gead aaEe qe snd P5SSs x OF
the existing bonds by parties most familiar with
the strength Of the security Of the new bonds
Associated with speyer & Co. in the purchase
OF the bonds are J. p. Morgan & Co. Lazard
Freres. Heldebsch. Ickelheimer Co, F. 5.
Smithers & Co. the Central Trust Company.
J. Kennedy Tod e. Co.. and E. II. Hartman. Of
New-York. as we'll Teixeira de Mattos
Brothers. OF Amsterdam; Speyer Brothers. OF
London. and Lag. Speyer Ellissen, OF Frankfort
on-the- Main.
The existing bonds Of the Lake Shore which
will be taken up in exchange for new bonds
amount TO S43, 1872, 600, and mature as follows:
April I, 1S9S 2,705, 900; April /. 1899, 81
3j5. 600; July 1. 1900, S14,440,O0O; December J..
1903, S24 692 600 These all the bonds on the
Lake Shore road proper. There are other bonds
on leased and controlled lines which are guar
anteed by the Lake Shore, but they are for
small amounts and for the most part have
considerable time 10 run.
There is no doubt that the opportunity TO OBJ
tain the new bonds will be generally avaied OF
by the holders or the present bonds- IheS Will
lose nothing in interest. the difference be-
tween the interest on the new and on the old
bonds will be allowed for in the exchange. and
they will obtain long-term bond which is al
ways desirable No American railroad bonds
were ever before placed at so high figure for
so low a rate Of interest as the new Lake Shore
bonds.
The interest on the present bonds amounts 70
50, .440 per annum. The interest on 500,
OOo 900 Of 31s per cent bonds will be Sli3O,OO0.
The saving VIII. accordingly, be Sl2I3 40.
The Lake Shore has capital stock of SoO,-
600 600 Of which S533J00 represents the stock
of the old Michigan Southern and Northern
Indiana Railroad. which 10 per cent dlvi-
dends, equal to S52,350 per annum are guaran-
teed On the remaining stock. $40 466,5OO. y
per cent dividends. equal 10 S296I 800 per an
mum, are paid The saving by the new bonds
will be equal 10 2ia per cent on this S49, ,4G6,JUl
OF stock The Lake Shore has a surplus of
nearly $l2000000
Lake Shore stock, which closed Monday at
161. advanced on the announcement Of the bond
issue 10 1Ili5. and closed at 1919. The differ
ent issues Of Lake Shore bonds ranged In price
from 40 to 122i2, according to the time they