Evening star., 1931-11-29
POWER FIRMS FACE
5. BOND MATUR|T|ES
Many Issues Will Fall Due
During the Next Twelve
Months.
Special Dispatch 70 The Star.

Epeclal DlSpatcn 70 The star.
NEW YORK, November 28.-Until
recently the senior securities of public
utility corporations have held q prefer
red position in the investment market.
While those Of highest rank in the rail-
road list have been under pressure, the
power and light bonds that are legal in
New York and other States have been
able to maintain a price record that
compares favorably with the high of
this year. Many Of the 5 per cent pub
lie utility issues are still selling at
premium.
This situation reflects two conditions.
First. that of the relatively excellent
showing of earnings of the power and
light companies due to the increase in
the domestic use OF power at the same
time that diminishing return is TAX
ing place in the consumption of COM
mercial power. Statistics prepared by
the national organization show some
remarkable cont1 asts between the two
types OF consumers throughout the
country. The power and light industry
IS the only one that has been able to
take up considerable part of the slack
in one department through an increase
in the activities in a newer and per-
hapS more aggrcSSiVely promoted reVe-
nue. field. The second reason for the
price difference suggested is the con-
slant shift from railroad into public
utility bonds by large investment cor
porations and by individuals.
Maturing Obligations.
The public utilities are now, however,
beginning to lace conditions in the
financial world that are embarrassing
to both the railroads and to the indus
trials. They. too have maturing obli-
cations. Inasmuch as the banks that
lend capital and the public that pur-
ChaseS the securities which the banks
and the investment houses originated
90 not seem to regard earnings as the
primary basis for loans, those power
and light companies that have ap-
#proaching maturities are becoming anX-
houS over the reception they may meet
when they take up the question of the
Prepayment or refunding of existing OBJ
LEGATIONS with their bankers.
A short time ago public utility hold
ing company had a 5l2 per cent bond
falling due. Obviously it could not re-
kplace this with an issue at the same
rate of interest So it made a PROPOSE
tion to its bondholders to accept a
bond bearing 6l2 per cent coupon. 1t
hs understood that there was a counter
suggestion which gave the holder of
Isl 900 par value in old bonds 81 200 par
value of new ones. There was no great
enthusiasm shown by. the bondholders
over either proposal.
Another operating company located
on the Pacific Coast had a small bond
issue maturing. 1t was permitted to
borrow by the California State Com
mission up to per cent cost basis.
This was turned down rather fatty by
Eastern bankers, although the concern
AhaS splendid record of earnings which
have held up during the depression 1t
is now said to be negotiating for a one
or two year loan from bankers in the
State where its operations are con-
Quoted.
In the next IL months the maturities
facing the public utilities are more than
double in amount those facing the rail-
roads IN the same period There are
20 different issues involved representing
an aggregate in excess of $3.50, 600 900.
BY months they are as follows: Decem-
ber, 1881, $15,400,000; January, 1882,
$5,710 900: February, S29, 300. 900;
March, $4,000 900; April, Sl4,700, 600;
May. S29, 100000 June, $52,70O,000;
July. $43.800, 600; August, $4,000, 900;
September, $51 900, 900; October, sl9,-
300, 600: November, $500, 900; and De-
cernber, 1882, $71 100000.
Majority for Small Amounts.
The majority of these are for COM
paratively small amounts, ranging from
s. 0000 900 up to SIS 900 ,00O Under nor
mal conditions these would not cause a
ripple on the surface of the money mar
ket. The largest are for $4,000 900,
hnd fortunately are of companies pos
Eessing the best of credit
Unless lending institutions take an
attitude quite different from that of
Today and show a disposition in the
toming months to release some OF their
boarded funds to corporations that can
enow their ability to cover their interest
requirements many times over in the
Eorst depression in so years, it will be
lfficult Tor even power and light COM /
anies with good credit to satisfactorily
AXE care of their 1882 maturities.
(Copyright, 1872