The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-10-21
Trends
Interesting Aspects
of Recent New
Financing
by VINCENT LYONS
Times Financial Editor


r. one in bond market circles. It
marked the completion Of the re-
tirement of the $3.50, 900 900
Fourth Liberty Loan a. per cent
bonds, the last of the wartime OBJ
legations Of the government. 1t
also was featured by the sale Of
large new bond issues by the ILL.,
nois Bell Telephone Co. and the
Anaconda Mining Co.
The Treasury's refunding pro-
gram can be called a success. More
than $999000,000 of the Liberties
was rendered by holders in eX
change for lower interest rate is
sues. Thus, the Federal govern
ment had TO dig into its cash box
for but $252, 100000 TO pay off those
owners who declined to participate
in the exchange offer.
The Illinois Bell Telephone Co.
offering Of s45 900 900 first and re-
funding mortgage 81 per cent
bonds, series B, due in 1870, were
gobblcd up by investors. Despite
the fact that the bonds were 81
per cent obligations. the under
writing syndicate, which was head
cd by the new firm Of Morgan,
Stanley 81 Co, priced the issue at
1922 per cent Of par. On this
basis the yield to the purchaser at
the time Of Offering was approx
mately "a per cent.
60 great was the demand for the
- issue that for a time dealers
were bidding 10334, or a premium
of Ia points over the initial Of
fering quotation.
Although unusual attention was
concentrated on the Bell flOtation
because Of the low coupon rate and
the long maturity, the operation is
significant in that it represents a
new departure in advertising since
the establishment of the Securities
81 Exchange Commission. The UNI
derwriters initiated the use of an
outline Of propactuS information.
Up to this time sellers of new issues
had reduced all advertisements to
bare announcements.
The proceeds Of the offering will
be used to retire $48,726,2 200 Of out
standing per cent mortgage bonds
which would have matured in
1856. Through the operation the
company pares its interest charges
IL per cent annually. The success
of the illinois Bell operation is eX-
pected to speed plans Of the Ameri-
can Telephone & Telegraph Co. for
rcfunding some of it's high coupon
issues into lower rate issues.
A NACONDA COPPER MINING
IA CO.'S sale of $55,O0O,000 IS
year Az per cent debentureS,
handled through Blyth & Co. and
IS other houses, was taken up by
investors within less than an hour
after its formal appearance. Priced
at 98i2 the issue was offered on
yield basis of approximately as
per cent Proceeds are to go to-
ward retirement of bank loans Of
the company and its subsidiaries.
Wall Street had been expecting
the Anaconda fotation for more
than year, Last week, however,
seemed particularly propitious as
the copper industrys position has
been improved materially recently.
Large buying, supposedly for war
purposes, has had the dual effect
of lifting the price and cutting
sharply into stocks, which have
been unWieldly for several years.
The feature of the debentures
is the establishment of a sinking
fund whereby it is expected sub
Stantial retirements may be made
prior to maturity. Beginning Aug.
Is, 1886, the company agrees to
pay into the sinking fund the sum
of 100000 annually, plus 20 per
cent of consolidated income for the
preceding year, subject to maxi
mum restrictions.