Evening star., 1933-01-14
ITALIAN CREDITS
WELL MAINTAINED
Dollar Bonds Command Good
PriceS-0ther Loans
Reviewed.
Special Dispatch to The Star.


NEW YORK, January 14-One oi
the credit surprises among European
borrowers in dollars has been the gov
ernment Of italy. The same Is true OF
the score or more of italian municipal
industrial and public utility applicants
for funds whose securities are now
listed in the American market. To-day
nearly all of these italian dollar loans
are quoted at the highest for the past
two years. A few of them are above
their offering prices.
The government of Italy rs, for In
stance, are now quoted above par. This
issue of $1oo, 600, 900 was brought out in
December, 1925, at e41z Earlier that
year the Kingdom Of Belgium had made
loan Of $50000,000 with per cent
coupon at 98. Twelve months before
that the French Republic had solo
100000, 900 of per cents in this coun-
try at ga.
Two months before the Italian, gov
ernment loan was authorized the Ger
man government had succeeded in ne
gotiating one of $110,00O,00O at pei
cent rate of interest and at an issue
price of 80, while in June, 1923, the
Austrian government had put out here
S25 100000 of Z per cent bonds at 90
guaranteed as to principal and interest
by eight European nations, of which
Italy is one.
Belgian Bonds.
The Belgian Z per cent bonds are
selling at premium over par of several
points. The French rs are quoted at a
premium OF % points. The German rs
are at discount from par of about &c
points and the Austrian rs are quoted
at 4 points above the subscription price
but at discount of 6 points.
The Italian dollar loans introduced
into the United States in the past seven
years have numbered 25. Their out
standing amount today is approximately
S3O0,000,000. The original government
loan of $100,000,000 has been reduced
to about s87,000,000 by retrenchments
through an annual sinking fund. Those
OF the cities of Rome and Milan have
oeen cut down about 100000 each,
or 10 per cent, through the same proc
ess. Smaller revisions downward have
occurred in most of the other Italian
loans. Two, which were identified with
the Italian public utility industry. have
recently been retired.
Altogether, the record of the Italian
government, cities and corporations for
promptly meeting ther interest and
sinking fund requirements has been an
admirable one and the original investors
in these dollar loans have Jared better
than in some of the better recognized
American credits.
In the revaluation of European cur
renc1es some years ago Italy established
the Ira on higher basis, relative to
the old rate, than did France or Bel
gium in reforming their currency sys-
TENS. This was expected to prove a
handicap to Italy. 1t has been so to
some extent, but in spite of it Italys
external credit has remained high and
during the past year has been steadily
improving. The strength in her dollar
bonds has not been due, as in the case
OF those Of France and GERMANY and
in some of the Scandinavian countries,
to the repurchase of them by her ma
tionals, although it is understood there
mas been a steady accumulation of these
loans by Italians in the United States.
The fact that Italy has had less
trouble with her national budget than
some Of the other European countries
has undoubtedly contributed to the IA
Vorable attitude of foreign investors to-
ward her external obligations.
Discount Rate Reductions.
basC May the discount rate in Italy
was reduced from 6 per cent to 5 per
cent: This week it has been further
cut 10 per cent. This brings it to a
parity with the discount rates of GEN.
tral banks in Germany and Norway and
below those OF Austria, Czechoslovakia,
hungary, Poland and Spain. The latest
report OF the Bank of Italy indicated
that its gold holdings steadily Increased
during 1882 and were Considerably
larger than toward the end of 1881, On
the other hand, the credits and balances
abroad of the bank have been decreas-
ing sharply, as have those of the Bank
OF France, and are now about 40 per
cent under those at the latter part of
1881.
(Copyright, 1933)