The Indianapolis times., 1936-03-04
MOST BIG UNITS
IN STEEL TRADE
CUT Debt COSTS
Reduced Refunding Rates
Involve Indebtedness
of 1894, ,762, 900.
BY w. IAN MACK
Times Special Writer

NEW YORK, March 4.-AlthOugh
more laggard than most industries
in the recovery movement, the
steel industry, has taken advantage
Of the prevailing easy money mar
ket conditions to refund high coupon
obligations with low interest-bear-
ing securities and to provide for
plant expansion and betterment
programs through the medium of
new capital financing, survey to-
day disclosed.
OF the $960,67 ,296 financing-re-
funding and new capital-under-
taken by general industry in the 13-
month period ended Jan. 81, last,
S381 1880, OPS, or 80 per cent, was ac-
counted for by that basic trade.
only one other line-oil refining
made public offerings Approximate
ing as much as "a per cent of the
steel industry's total with an
aggregate, exclusive of privately
placed issues, of $141, 1908 $50 in the |
period.
S175,762, 900 on Way
All major units in the steel line
with the exception of the United
States Steel Corp. have completed
refunding and new capital programs
or have such projects in contempla-
ton. Those in the offing involve
approximately SITS, 10000, repre-
sented by $35,000,0O0 for Wheeling
Steel Corp, $10,800,0O0 for Otis
Steel Co., $4S,0O0,0OO for Jones g.
Laughlin Steel Corp. and $84, ,962 900
for Youngstcn Sheet and Tube Co.
Previously undertaken, publicly or
otherwise, were actual refunding
deals, embracing moderate sums for
new capital purposes, for a total of
$219,00G 1000. Of this amount, $55,-
ooo,600 was accounted for by the
Bethlehem Steel Corp, $50,00O,OOO
by National Steel Corp, $69, 900, 900
by the Republic Steel Corp, and
$45 100000 by the Inland Steel Corp,
of which $1O,0O0,O00 were placed
privately.
Savings at S3,27O,O0O
Savings resulting from these oper-
ations are indicated in the neigh
borhood of $3,270,00O annually, an
amount equivalent to Is per cent
of the indicated net earnings of the
entire industry for 1885, at approx
imately $13,000,000. Estimated saw
ings by individual companies on
completed or projected refundings
follow:
Inland Steel ..............$4 .$4OO, 500 !
Jones S5 Laughlin .... 64,770 !
Youngstown Sheet and Tube 849,6 $50 |
Bethlehem Steel ........... 392, ,622 |
Otis Steel .................. 10000 |
National Steel ............ 372,215 |
Republic Steel ............ 676,878 |
Wheeling Steel ......... 63,081 |
Earnings Bolstered
A concomitant of the refunding
operations will be the addition to
per share earnings of the various
companies of amounts ranging from
few cents a share in the case of
Bethlehem Steel, provided preferred
dividend requirements are covered,
to more than so cents share with
respect to Youngstown. Moreover,
they provide the industry with an
overhead reduction of about 10
cents a ton on the basis of last
years ingot production of 33,4O0,O00
tons.
Little financing, if any, other than
those already effected or contem-
plated appears to be in prospect for
the industry during the present
year. Numerous observers, however,
imply that a relatively large new
capital issue might be placed on the
market, by the Steel Corp, with
moderately sized deals probable in
the event small units in bankruptcy
are reorganized. In the latter cases,
proceeds from new issues would be
used for modernization and working
capital purposes.