Evening star., 1947-08-10
Chicago Transit Bonds
Reported Selling Well
After Difficulties
By the Assoeiotsd Press

NEW YORK, Aug. 9.-Chicago's
troubles in marketing $105 900 ,000 Of
new bonds, one of the most talked-of
financial deals in months, appeared
near an end at the week end.
The City Of Chicago Transit
Authority solved its problem of pub
licly marketing the bonds the sec
ond largest revenue bond offering
on record, by selling the issue to
a syndicate on a conditional basis.
The bonds were reoffered publicly
August on the same basis, and
almost one-third of the issue was
sold within "a hours.
The investment banking group
which had originally planned to
market the Chicago Transits" an
nounced last Monday 1t was unable
to underwrite the sale.
The announcement was construed
by bondmen to indicate skittish
attitude by investors toward trac-
ton type bonds. Mayor Martin H.
Kennedy said he believed failure
Of the syndicate to bid on the bonds
might have been caused by "politi-
cal" forces.
Counter Proposal Accepted.
The same syndicate, headed by
Harris Hall & Co., the first Boston
Corp, and Blyth & Co., did not
abandon the underwriting, however,
and made a proposal which the
city accepted.
Instead of making a firm bid for
the issue, the syndicate conditioned
the underwriting on an agreement
to take up all the bonds only if at
least 80 per cent OF the total
s105 10000 is subscribed by in
vestors by September IL. If the
banking group has not sold 80 per
cent by then, the agreement will
expire unless extended by mutual
agreement.
The offering was broken down
into two groups: $40, ,000, 900 of serial
bonds priced from 104 for 3As due
1858. to 102 for 35ss due 1872. with
yields ranging from $50 to $50 per
cent. The remaining SOS 900 900 car
rying 3& per cent coupon and
due in 1878, was priced at 103 to
yield 3.59 per cent to maturity.
Average cost to the authority will
be about 3.69 per cent.
Head of the marketing syndicate
said on Friday he had every con-
fidence" that the necessary 80 per
cent would be sold before septem-
ber IL.
Other Cases Recalled.
Bond dealers recalled that the
city OF Cleveland failed to receive a
bid at its recent offering of $22,-
100000 Of new transit bonds. the
State of Alabama failed to sell $4,-
100000 dock revenue bonds, and
underwriters of a $7,0O0000 Seattle
revenue bond had to cut the public
Offering price to tempt buying in
terest.
In the listed market railroad is
sues coasted along on a fairly stable
keel, with several situations COM
manding attention.
Bonds of st. Louis San Francisco
Railway were given a boost when il
was disclosed that proposals TO,
merger with the Gulf Mobile &
Ohio.
Atlantic & Danville obligations
lost ground after an announcement
that the Southern Railway woule
not renew its lease of A. 81 D. wher
1t expires July l, 1949.
Australian dollar bonds sagged a.
gloom spread over the British
economic position, which many in.
vestors apparently linked CLOSELY
with the future of Australia.
World Bank bonds lost a little
ground during the week, with the
long-term IS off 1882 at lO2 4/3:
and the short-term 2As down 3/3s
at 101.
United States Government
moved narrowly.
Sales totaled- $14 ,593 800, compared
with $18,462,000 a week earlier and
SIS, 500, 300 a year ago.