The Bridgeport evening farmer., 1915-10-21
ANGLO-FRENCH LOAN.

From the invektment standpoint the conversion privilege on the $500, 100000 Ang1o-French dye-year per cent loan is one of the most favorable features of the issue. This is the opinion of leading investment bankers. By signifying a desire to do so on or before April 1 5, 1920, the holder Of the fve-year securities can convert them at any time up to ma tl1rity into joint bonds of the British and French governments, bearing F per cent Interest and running to De- tober Is, I94Q, but redeemable at the option of t11e governments on or af- ter October 15e 1880.
 In other words, a purchaser of the present bonds gets joint and sow eTal obligation of Great Britain and France that will pay 5 per cent inter est for five years and 4 # per. cent for at least 10 yeaf& more, and he has the option of taking back his money at the end of five years with per cent added, which would increase the return on his investment for that period to nearly 57z per cent a year. The yield on the 4 F per cent bonds. which heMcou1d take. at the present price of .-98- would be approximately 4.75 per cent.
 Looking at it from 9. more specu1a- tive Viewpoint, great value can be seen in the, conversion privilege in the fact that it; gives practical assur-
  bonds at war prices that he will have the advantage of peace market before the obligation natures. The securities, being several well as joint obligations of the two govern nnents, should enjoy the highest credit reached by either of them within the next 5 years. Within that period the war and its effect on in terest rates can reasonably be e1- pected to have passed, and govern @aI %rl compare favorably with those before the war which were the lowest for over 20 years,
 In regard to tfe future value of the ave-year1 5 per cent Anglo-French bonds, a prominent banker at the head of the syndicate saidi ''The best basis for figuring the probable future value of these bonds in time of peace, or the A per cent bonds into which they may be converted, is not English consoIs at IA, paying 2A per cent interest. because there were special reasons for that high price; but French 3 per cent rentes, which in times of peace sell in the sos. or on a 8 per cent basis around s."
 Adopting this conservative basis for an estimate of the future value of the bonds under peace. conditions, it is found that a price well over par may be quite possible In every year between 1SS9 and 1918 FFench fenCeS sold above 95; in 1897 they went as high as 1o5A. At a5 they returned 3.l5 per cent. A 15-year 4 F bond to return the same yield would have to sell at 116. As the new bonds ap proach maturity, or their redeemable date in 1880. however, they would sell nearer par and yet give the same yield. Their price five years hence, when the war will probably be over aand some of it's effects passed, would Be III F to yield SIS per cent When the bonds have but five years to run they would sell at 1oe to return the same yield Even at the low price of 8S 4 for rentes in 1s12-the lowest price in over two deeades-the corresponding level for 8 Az per cent bond with 10 wears to run would be 109A, and at five years from maturity would be 105 At the 1913 lower price of 83.AB,~i can now be said to have reflected the coming war, the corresponding price for 1e-year E s would still be 107 A, and for a fve-year bond about 1O4A.