Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-02-06
NEW FINANCING
aOWS.BOND TRADE
Record Set for Offerings,
Nearly Hitting $500, 900, 900
Mark for the Week.
; Ry GEORGE t. HUGHES.


si.NEW YORK, February s,7-Th'
outstanding feature Of the investmen
IYarket this week has been the hug
volume of new financing. Januaf!
SET 3 new high record for amount o
Yf$w bond offerings, and February ma
k1Srted in in a fair way TO surpas'
The january total New offerings thi'
week approximate ..S297 10000, tn
largest ON record for single week
This amount compares with little
less than Sl95, 000 900 last week ahe
$50 500 900 in the corresponding
week a year ago.
OF course. ali this does not repre-
sent new capital. 4 large amount
accounted. for by refundlng opera
lions, IS for instance when the MIS-
souri, Pacific sold S95, 900 900 in pei
cent bonds to- retire OUTSTANDING
obligations carrying higher coupon
rate. This process has been gong g!
all along the line. Corporations nave
been rushing in to take advantage o.
The present unprecedented investment
10 reduce liked charges on theii
funded Indebtedness.
No Sign OF Let L p
Tn January over 500 900 900 OF
bonds and notes were called for pay,
ment i'm advance of maturities. ano
over s6e 900 900 in bonds are TO zoe
retired in February sNeNertheless
these refundinE issues are masKeVec
before the ones they are to replace
are actually paid off, so that tenn
poralily- they add to the amount out
standing, Nor is there any sign of 3
let up. The Missouri Pacific issue
WAS the second largest single piece ol
railroad financing on record. Mex
week the $50 eco geo Aluminium EoRR
pany of America refunding loan
stands out as zone of the, largest IN
dustrial offerings in years, .@s =
IL was, not surprising that TINS
flood of fresh investment Nadiums
should at last have an effect on the
market for outstanding issues. Prices
which had held firmly early in the
week Yielded toward the end, and the
nearest approach to a reaction the
bond market has seen the first OF the
year followed. = Fs~ al
Undoubtedly Iheres has. been a good
deal of speculative buying especially
OF the high yielding foreign obliga
tons. during the recent advance.
thereby weakening the technical posi-
ton of the market. SO when prices
wavered profit~talxing from this source
made its appearance. sta /. vi
Temporary Condition.
That. all this, is but a. temporary
condition admits of no dispute, The
fundamentals that affect investment
values remain the same. Given q
period in which to digest the new
offerings and to assimiiate the gains
in seasoned bonds, the investment, de
mand must again make itself felt
Money is just as easy. as ever. Cal
funds Oh the stock Exchange have
been quoted at 4 per cent all the week
and in the so-called outside market
accommodation has been obtainable
below that figure. There has been
an easier tone in time money in COM
merciaI paper IA ndTfn bankers accept
ances. Gold continues to come into
this country. The total gold imports
at New York during the first % days
of January were almost one-fourth
of the total for the entire year 1926
The much talked about reduction
IN the rediscount rate of the New
York Federal Reserve Bank is still a
matter for the future. No action was
taken this week and it is unsafe to
make predictions about next. week.
Whatever is done, however, ii will not
materially affect the situation. except
possibly in one particular. A cur in
the rate might check the fall III
eterfing exchange and some weight
may be given to this consideration by
the banking authorities. AS far as
the domestic outlook is concerned
there is no need for adding to the
already superintendent supply of
credit.
Foreign Bonds.
Foreign bonds went off with the
rest Of the list at the close of the
week. Foreign news, however, was
more encouraging The Bank OF
France cut it's discount rate from 6la
to 513 per cent and !, Washington
dispatches quoted Secretary Mellon as
of the opinion that the. French eco
nomic situation was distinctly i'm
proved. 1t was also intiInated ain
officially in the dispatches that the
ban now existing against American
loans to countries which have moi
funded their war Indebtedness to the
United states was not going to be
so strictly enforced No objection
for instance has been raised to this
private sale on this side of French
obligations acquired in other markets
In any, event If the purpose of thu
prohibition against new loans t6
France was to hasten ratification oi
the debt refunding agreement it has
not been a success,
During all the weeks excited specu
lation in railway stocks. chiefly those
with merger prospects, there has beer
only a moderate interest in. the cor
responding bonds. OF course, wher
a. bond carried a conversion privilege
its price movement co-ordinated with
that of the stock concerned. but wher
its value simply depended on assets
and earnings, the bond market has
shown a. conservatism quite unknown
in stocks. This is az it should be, fol
even if the bonds of some OF tho
smaller lines are assumed by a larger
system in consolidation, their xalus
in the last analysis depends upon tho
which fhatr a IioY,