Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-11-21
BOND
PROVING POPULAR
Investors Prefer Notes Ma.
turing in One to Two
Years.
ny CHARLES v. sPEARE.

Special Dispatch to The star.
NEW YORK, November 2l.--It Is q
striking commentary on the resistance
of investors to long-teym corporation
bonds that in q period more favorable
to long-term financing than for several
years f = now found necessary to raise
new capital on short-teFm notes.
One large public utility company to.
day Is Offering Q per cent note
amounting to $l0,000,O0 which ma
lures December !, 1891. Ordinarily,
with interest rates at their present
level, this concern would be expected to
sell o Az. or per cent bond maturing
in 80 or more years. Tomorrow another
public utility corporation viii sell q
block Of one-year per cent convert
ihle bonds which give the purchaser
the option OF ~ months hence ex-
changing his note into O long-term
first lien bond, II Money and market
conditions at that time favor such q
substitution.
Land Bank Notes.
The offering. on Monday Of Federal
bonds met with q great success. They
have since gone to a premium. Usually
such bonds are set up to run for con-
siderable term Of years. The mood Of
buyers of this type Of security, how
ever, had to be taken into account by
the syndicate making the offering.
concessions were made to it in the
form OF a short maturity. Under the
present circumstances 1t is expected
mat the Treasury financing necessary
70 take care of the December MATURE
ties VIII again be in the nature Of COM
peFatlVely short certificates Of indebt-
edness.
Corporations that were able to take
ful advantage Of the lew interest rates
N 1927 and in the early part of 192a
ana 70 replace high coupon bonds with
~ Per cent issues have this year made
sman progress along these lines. For
the ten months to October 81 less than
per cent Of the total of all new
financing has been of refunding ma
ture. This compares with about %
per cent for the same period in 1928
and 20 per cent in 1927. In 1926 the
ratio was about the same as at present.
Bond Rsfunding Delayed.
A large amount Of bond and preferred
stock refunding has been held up by
the weakened condition Of the invest
ment market and Is likely to be post
poned until the early part Of 1881.
This includes q 500, 100000 public
the point of contamination when a
turn in the market made it impossible
for the corporation and its bankers to
come to terms 1t had also been exc
pected that q considerable number Of .
per cent public utility preferred stocks
would be called and replaced by per
cent or 6 per cent issues, but recently
the market for these senior stock issues
has been relatively a. soft 81 that Tor
bonds.
Another significant phase Of the cur
rent investment market Is the demand
for tax-exempt issues.
A high proportion OF this weeks to-
tai of new bond offerings aSaTegattng
500, 00o, 900, this being the most active
week in over a month, represents the
bonds of various municipalities and
those Of the Federal Land Bank, The
market for this type Of security has
been slowly pointing upward. Aside
1 Der cent bonds, there has been coed
distribution OF the smaller municipal
loans as they have been advertised. This
Is q phase of q period when unsettle-
ment In speculative Issues takes place
and investors become highly conserve
tive in their selection and demand only
the best securities available.
Stock Offerings.
The detailed figures Of financing for
the 10 months to October 81, which
have just been published, are of interest
mainly in the contrast shewn between
offerings of stocks this year and in tbs
same period of 1929. Last year TO Octo.
Der 81, total issues Of common and pres
ferred stocks had been nearly $780,
O00,0 900. For the same period this year
they were $l,436,000,000. The largest
decreases were in the stocks of invest
ment trusts and trading corporations
which dropped from q total OF $2,094,
000, 900 10 about $113 ,000, 900. Those OF
public utility corporations fell of from
Sl,33o, 100000 to around $7ls,000,00
(CopyTight, 1851