The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-05
FRENCH RAIL BONDS
WILL BE SOLD HERE
Syndicate to Place 100000
Francs 6 Per Cent. Issue
of Midi Road.
rs FIRST OFFER OF KIND
Equipment of Pittsburgh and
Lake Erie to Be Floated
by MOrgans.
Is FIRST OFFER OF KIND

The first official offering of O French
railroad issue on the American market
will be made this week. when a syndi-
cate headed by A. Iselin & Co, Hemp
hill, Noyes & Co. and GUIDE, Winmill &
Co. will offer 100000 francs per
cent bonds of the Midi railway OF
France at $50 a bond of 1000 franc de-
nomination. AS far as is known that
offering Is the first official one OF a
European railroad issue In this market
Another interesting development yes
terday was the dec. sion Of j. p. Morgan
Il Co. TO put coupon rate of 6h per
cent on a new equipment issue which
will be offered to-day. 1t is the first
break from previous coupon rates Of
per cent on equipments. The issue Is a
4, small one. consisting of $2,400,OOO of
Pittsburgh and Lake Erie one to fifteen
year ECU pments. those running for one
year to five years being offered to yield
! Z per cent, those for six to ten years
being offered to yield 6B per cent, and
/ those for eleven to fifteen years being
offered to yield So per cent. The
| equipment which secures the issue con-
| sists of new steel hopper cars
1t was reported yesterday, but not
confirmed, that the Sears Roebuck FL
| nancing to the extent of $4,000, 600 will
| be handled by Goldman, Sachs & Co.
In fow days, or as soon as Interstate
Commerce Commission approval be OBJ
tanned, there will be an offering of IL
inois Central and Central of Georgia
equipments, the amount exceeding $l3,-
100000. Other railroad financing Is In
prospect.
The proceeds of the offering of So
100000 francs of the Midi railway are
to be expended in the United States.
Consequently that operation becomes a
step to obtain dollar credits here, to be
used to acquire equipment. materials
and supplies. The full name of the rail-
road is the Compagnie des Chemins de
Fer du Midi. The company has before
the French investment public an offer
ing of unstated amount of the Midi rail-
way bonds at about go and interest, its
coupon rate being per cent. The books
for subscriptions in France will be open
long time. perhaps year or more,
because French methods of financing
differ materially from practices here.
At the present rate of exchange Amer
leans could subscribe to the French is
sue at about $61.6 thousand franc
bond.
Although the present American issue Is
portion of the French offering, 1t has
the special advantage OF having the
coupons and the principal payable in
New York. At the option of their
holders those bonds are convertible at
par into French series of the same
issue quoted on the Paris Bourse. The
bonds, .redeemable by drawings not later
than 1860 bear per nt.interest and are
to be offered at n price which will yield
6.35 per cent The bonds are In coupon
form, I'm denominations of 1000 francs.
and with interest payable on June / and
December 1. Payment of the principal
and interest of the Midi company bonds
and 10 per cent annually of the capital
stock of the company is assured through
the guarantee of the French Govern
-nent to which the property reverts at
the end of a certain period of years. said
to be fifty, In return for the guarantee.
The Midi has outstanding bonds. |
guaranteed by the French Government. |
bearing coupon as low as 2h per cent |
and ranging up to per cent The pres
emit French and American issues bear |
the highest coupon put out by the Midi |
company. The bonds are exempt from |
I'll French taxes for non-residents OF |
France.
The Midi system covers about 2.547 |
miles The trunk line extends from Bor- |
1eaux on the Atlantic Ocean to Mont |
nellier and Cette on the Mediterranean. |
Branching south of that line. the system
covers the entire Spanish border and |
forms the only railroad connection be-
tweent Spain and the Continent.