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$80 BILLION IN BOND REDEMPTIONS POSSIBLE THIS YEAR, FITCH SAYS

 NEW YORK, Feb. 12 /PRNewswire/ -- Almost $80 billion in investment grade corporate bonds could be redeemed in 1993, according to calculations based on the Fitch Corporate Bond Database. This would surpass the almost $70 billion of major industry bonds refunded last year. As of yesterday, $17.7 billion in new refundings had already been announced.
 Given current interest rates, Fitch estimates that 1,112 issues with a total par value of $79.5 billion are candidates for bond calls and refundings this year. The 1993 total was computed based on current interest rates using a model developed by Andrew Kalotay & Associates and the Fitch Corporate Bond Database.
 Fitch identified a total of $148.5 billion in outstanding investment grade securities which, based on their indentures, are presently refundable or become refundable this year. The $79.5 billion in issues that could reasonably be expected to be refunded with rates at present levels was estimated through a model which assessed the call and refunding options in each bond.
 Utilities have by far the largest pool of eligible callable bonds, with a par amount of $57 billion. Of this total, $36 billion are feasible candidates for redemption. The pool of callable industrial bonds is $23.5 billion, of which $14 billion could be redeemed. Approximately $12.1 billion of telephone company bonds could be redeemed, as could $11.4 billion of eligible bank and finance company bonds. Approximately $1.4 billion in Yankee bonds and $4.6 billion (US) Canadian bonds could be redeemed.
 Last year's call activity was spread over all industry sectors with utilities making up 40.1 percent of all calls, industrials 25.9 percent, bank and finance companies 15.2 percent, telephones 10.1 percent, and Yankees and Canadian issues the remaining 8.7 percent.
 The estimates of potential calls are based on a Fitch study which used Jan. 4 as its interest rate benchmark. On that date, the six-month Treasury bill yielded 3.36 percent and the 30-year T-bond yielded 7.39 percent. The study evaluated the probability of redemption given various interest rate scenarios with changes of up to 100 basis points in long- and short-term rates. Potential refunding activity drops sharply if rates rise.
 -0- 2/12/93
 /CONTACT: Andrea DelGaldo, 212-908-0603, or Janet Zimmerman, 212-908-0582, both of Fitch/


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Publication:PR Newswire
Date:Feb 12, 1993
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