France's Bond Coup

Held by bankers & investors in the U. S. are |70,000,000 of a French bond issue, paying a high interest rate of 8%. Premier Raymond Poincare and his Government mulled over the problem of retiring them in favor of a new loan at a lower rate to be sought in the U. S. market. Governments who have not yet agreed upon a plan to pay their debts to this country are forbidden to raise funds in the U. S.

Last week, by an international financial coup whose benefits to her will be threefold, France emerged from her dilemma with $75,000,000 loaned to her by the Swedish Match Co., the largest advance ever made to a Government by a corporate enterprise of this kind. France must pay but 5% to the Swedish Match Co. for the money. She saved $1,850,000 in annual interest; she rids herself of the old $70,000,000 issue, a nuisance: (with the new funds it may be called and paid for next March 15); and she obviates possible delicate dickering with Ambassadorial Washington. And U. S. investors contribute $50,000,000 to the financing.

The Swedish Match Co. controls the International Match Co., a U. S. corporation. This son of its Swedish Corporate parent takes $50,000,000 of the new French bonds. In turn the International will sell to U. S. investors $50,000,000 of its own debentures. They will yield 5% and mature in 20 years.

Powerful and extensive are the diversified interests of the Swedish Match Co. It and the International make matches in 35 countries. On Dec. 31, 1926, net assets were $162,934,000. Much good accrues to them from the deal. Bargaining, they won a stake in the French market hitherto controlled by French monopoly. Match making machinery and raw products for match making are to be sold in France by the Scandinavian concern, their agreement said. In this new trade opening the International Co. is to share.