New-York tribune., 1922-05-23
Investment Information

TO surrender 60 per cent Of their
bonds " 'ue'i
ne factor which is calculated to IN
duce holders Of bonds and stock to
IufchaSe the & per cent notes ar ~
,'ast TO assent 10 the plan to the OK.
,eh' ol giving up 60 per cent Of their
oollds or stock, is the prosnoct Of In.
tefoorough Rapid Transit stock becom.
!Iis more valuable as 81 dividend pay-
I;s lis , security after July. 1926. No
ulI'uelloS can be paid before that time.
uut the dlFldend on Manhattan Rail.
way Stock cannot be increased to more
than per cent in any wear unless the
lhterborough stock has received 4 ner
cent The payment of cumulative divl-
dends on Manhattan stock. of course
must be considered apart from this
| rule. ''''9
Several holders of Jnterborong5
Rapid Transit first and refundiny *
nave asked our advice on the plan as il
anects their bonds. We answer with
GU out hesitation that they should assent
ne per cent bonds are not subject
TO an assessment Of any kind. The
plan contemplates only the postpone
meht OF sinking fund requirements for
3 perlod OF five years to end July /
l9lo. But the yearly sinking fund pay
N"N' "l'el tHat date are to be in
creased so that the whole may he com
pletely ';, retired by maturity: A sum
equivalent to the usual sinking fund
bust be set aside and used for these
purposes before dividends can be paid
ION Manhattan Railway stock
Where do the holders Of INTERIOR
ough Consolidated preferred and com
mon stock come in? Several more
readers have asked that question.
Holders of these stocks will have
the right to subscribe to any portion
| OF tho 8 per cent notes not taken by
holders of either the "a per cent bonds
or peterborough Rapid Transit stock.
In the event that there are any of the
notes left for the consolidated stock
holders to take, their inducemont for
subscribing at par will be share in
the distribution of the 4i2 per cent
bonds and lnterborough Rapid Transit
stock surrendered. The right to sub
scribe TO the 6 per cent notes VIII be
enjoyed by the Consolidated preferred
stock holders first. 1t seems improb-
able that all of the $10500, 900 of notes
will be taken, for if every holder of
4 l2 per cent bonds and lnterborough
Rand Transit stock should purchase
notes the aggregate would be almost
exactly the amount offered. Needless
TO say there will be investors Who on
account Of inability to raise the neces-
sary cash. will be forced to surrender
go Der cent of their holdings. Whether
the holders of Consolidated preferred
will allow any of the notes to go to
the common stock holders is problem
atical, but we do not think it likely
that they viii.
The position Of investors who hold
tho marlborough Rapid Transit Sc
cured convertible notes viii be strength
eNod under tho readjustment plan.
These notes, originally bearing d z
per cent coupon rate. matured Septom-
Der I, 1921. The owners of $37,445,300
of them agreed to an extension Of one
year on consideration of an additional
| per cent in the interest rate The
holders of $500 100 refused or failed to
give their consent to the extension.
Under the new plan these notes are
extended again for ten years at per
cont, the collateral remaining un-
changed. The position Of holders Of
these notes is strengthened not oAly be
cause tho extension gives the Inter
! borough new lease of life but also
| because payment of interest on this is
/ sue now becomes an obliga ton coming
ahead cf dividends on Manhattan Rail
way stock