Venturers' Corner At long last the Cordoba Central Railway purchase
has passed into Argentine law and the company becomes possessed of £8,800,000 of Argentine State Railway 4 per cent. bonds and £7o0,00o in cash, with a further cash sum to come for stores in hand. These State Railway bonds are sterling bonds and the interest will be regularly made over to Baring Brothers without being affected by the rate of exchange. The bonds themselves are " blocked " in the sense that they cannot be sold for five years, but, apart from this, I should regard them as every bit as well secured as Argentine Govern- ment loans. Now the Cordoba Company is obviously about to become an investment trust, holding £8,800,000 of these sterling bonds and having, say, a further £80o,000 available for investment after making a small cash payment to its first debenture holders.
Under the scheme of arrangement now proposed the really interesting stock is the Income Debenture, which is to receive £25 nominal of " B " Debenture for every £m° outstanding. If the scheme becomes effective, there will be roughly £2,000,000 of this " B " stock ranking behind £8,000,000 of 3i per cent. First Debentures. To pay the First Debenture interest will call for £280,000, whereas the c3mpany's total revenue, assuming the re-investment of the surplus cash at 4 per cent., should be about L38o,000. On £2,000,000 of " B " stock the residual Ltoo,000 is equivalent to 5 per cent. At the current quotation of £t I- for the Income Debentures, which will receive £25 nominal per L too of " B " Debentures, a buyer would be acquiring the new " B " stock at £46 per £100. This seems to me to be a very attractive basis for buying a stock with a pro- spective income of 5 per cent. derived from what are virtually Argentine Government bonds. CUSTOS.
(Financial Notes on page 72.)
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