Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-11
NEW BOND ISSUES
WILL APPEAR SOON
A. T. & T. Offering to Be
First Test of Invest
ment Market.
BY CHARLES F. sPEARE.

Special Dispatch to The Star.
NEW YORK, January 1.-THE IN
vestment market is about to be tested
for its capacity to absorb new issues
and for a yield basis that will attract
the public to popular offerings.
Houses of issue and dealers believe
that the time has arrived when recogni-
ton should be made of the easier money
conditions, the improvement in Sentl-
ment toward long-term obligations and
the increase in the deposits OF national
and State banks and trust companies
and Of savings banks. Consequently
there are in the making new bond issues
aggregating between $200,000,000 and
$500, 900 900, which will be presented to
the public for subscription in the next
few weeks.
First Test.
The first test is to be through the
medium of a $150, 1000, 900 sale of Ameri-
can Telephone g. Telegraph 5 per cent
sinking fund bonds, for which subscrip-
tons were being taken today. 1t was
reported that though Street" bids as
high as 1902 were heard this after
noon the price of these bonds will be a
shade under par. Bonds of the same
issue are now listed on the Stock EX-
change and we're selling there today at
1919. On Thursday they touched 104,
but have dropped in a readjustment in
their quotation to that for the proposed
issue. A year ago they sold at los g
The policy of the banking group which
has these bonds for sale is to 'sweeten"
the issue by making the price well be-
low that of the old bonds and in this
way make 1t go over big" and so create
a foundation for broader and stronger
bond market.
The success of the $60,000,000 issue
Of insult Utility Investment, Inc, per
cent convertibles previously had made a
good impression in investment circles,
which was supplemented by the quick
retail sale. mainly to banks, of the
province of Buenos Aires 6la per cent
six-month notes and the $4,000, 900
three-year note issue of the Boston
Edison Illuminating Co.
Another large issue in immediate
prospect Is that of $35, 5000, 900 Chesa-
peake g. Ohio Railway Az per cent
bonds which have just been authorized
by the Interstate Commerce Commits
sion. It is understood that there are
four or five important railroad bond
offerings now under negotiation and
that the subscription price will be fixed
later, depending on how the market re-
spends to the issues now being offered.
High-grade Bonds.
There is a notable scarcity OF nigh
grade bond issues. Dealers in railroad
equipment trust certificates and in
underlying mortgages are having diff
Guilty in supplying them to their Gus
toners. They find that the individuals
and institutions that are buying bonds
want issues of the very highest grade.
Many buyers have recently been in the
stock market, and after their expert
ences with speculative issues have gone
to the extreme of conservatism in the
placing of their funds. Equipment trust
certificates that only few weeks ago
were hard to sell on a S per cent basis
are now scarce on a 4.65 basis, with the
prediction of specialists In this field
that they will soon go to "a per cent
yield basis.
Since the first Of December deposits
of banks In this part Of the country
have been picking up gradually. Most
banks seem to have recovered from the
drain that came during the stock mar
ket panic and in the two or three weeks
following it. This has improved the de-
mand for institutional bonds. The
savings banks In New York City and in
the suburban areas almost all report
substantial gains since the first OF the
year and many new accounts in this
period. This has started savings bank
trustees again thinking about invest
ments, although it will take some time
for them to recover the losses in de-
posits Of the months of october and
November, with some of them losing
ground even up to the middle OF De-
cember.