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CORPORATE DEBT REFINANCING ACTIVITIES MAY EXPLAIN MODEST ECONOMIC PACE, SIA SAYS

 /ADVANCE/ NEW YORK, May 26 /PRNewswire/ -- Corporate refinancing of more expensive debt or replacement of equity for debt, and not financing for expanding plant and equipment, may explain to some extent why the nation's economic recovery remains modest, a Securities Industry Association economist said today.
 However, the strategy enables more money to be retained by corporations and consumers for additional spending on investment and consumption when confidence returns, Jeffrey M. Schaefer, senior vice president, research, said in the current "Investor Activity Report" (I.A.R.).
 Overall, domestic underwriting activity continues to "boom," he said.
 Relative to all other quarters, first quarter 1993 ranked first in terms of total underwriting capital raised; first in terms of debt financing; and fourth in terms of equity capital raised, Mr. Schaefer said. Moreover, in the area of "pure risk capital," the quarter placed second in raising capital for initial public offerings, excluding closed-end funds.
 In some areas, such as public offerings of common and preferred stock, which includes IPOs and closed-end funds, results for the first quarter alone exceeded full year 1990, Mr. Schaefer said.
 As recently reported, corporate debt underwritings totaled $238.7 billion in the first quarter, compared to $309.7 billion in all 1992; and public offerings of common and preferred stock totaled $28.2 billion, compared to $101.6 billion in all 1992 and $23.8 billion in all 1990.
 Capital raised for IPOs alone totaled $7.5 billion, second only to the record $7.9 billion raised in first quarter 1992.
 "Despite the recent impressive capital-raising figures, we have a considerable way to go to meet the capital needs in the U.S. and elsewhere," Mr. Schaefer said.
 Debt raised in 1986-1990 was relatively flat, while equity capital raised was down sharply during 1988-1990, he noted.
 -0- 5/26/93/1830
 /CONTACT: Art Samansky or Karen San Antonio of SIA, 212-608-1500/


CO: Securities Industry Association ST: New York IN: FIN SU: ECO

GK-OS -- NY049 -- 2496 05/26/93 13:19 EDT
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Date:May 26, 1993
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