FOREIGN RELATIONS, 19 4 2, VOLUME VI



not interfere with acquiring the bonds necessary to complete the
operation.

821.51 Mortgage Bank of Colombia/66
Memorandumy by the Chief of the Financial Division (Livesey) to
  Mr. James H. Wright of the Division of the American Republics

                                    [WASHINGTON,] June 10, 1942.
  MR. WRIGHT: I have looked over the texts supplied by Ambassador
Turbay appertaining to the offer to be made by the Agricultural
Mortgage Bank. It will offer 3 per cent bonds of the Government of
the Republic of Colombia which are already outstanding and listed
on the New York Stock Exchange in amounts ($1100 face value of
Government bonds for $1000 face value of guaranteed bonds and
$750 face value of Government bonds for $1000 par value of non-
guaranteed bonds) which at yesterday's closing price on the New
York Stock Exchange for the Government bonds would give a market
value of $407 for every $1000 guaranteed bond and $277.50 for every
$1000 non-guaranteed bond. Of course the bonds to be surrendered
have some ten years of unpaid coupons attached but still I think the
offer will leave holders not too dissatisfied.
  One irritant to holders will be that in almost every case they will
have to receive "Certificates" for the parts of the $1100 and the
$750 of Government bonds which cannot be paid in bonds of $500
or $1000 par value. They will have to sell these certificates or buy
others over the counter to make up $500 amounts which they can con-
vert into Government bonds, or else wait until 1945 and then be paid
in cash drawn from the proceeds of sale of the Government bonds
not theretofore claimed under the Bank's offer. This will be a
nuisance but there is no help for it. The low price at which these
certificates (which are not listed on the Stock Exchange) will sell
will somewhat diminish the above stated market values of the offer
so far as concerns most holders.
  Any statement the Department makes in support of the offer
need not touch on these particulars. A statement of approbation or
gratification in very general terms seems entirely warranted and
likely to be in line with the reaction of bondholders and the in-
terested public to the offer. The persons who will remain dissatisfied
are the holders of Colombian departmental and municipal bonds who
still await in vain for any offer from the debtors. In this connection
it will be noted that the offer is entirely in the name of the Agri-
cultural Mortgage Bank and that any statement which the Depart-
ment may make relating to the good offices of the Colombian Govern-



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