Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 15, 1995 TAG: 9511150051
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
More than 61 companies jumped at the chance to register future stock and bond sales with the Securities and Exchange Commission, many taking advantage of steeply discounted fees because of the stalemate over the federal budget.
The SEC said the public companies registered at least $65 billion in securities in Tuesday's filing spree. The companies collectively saved at least $9.4 million because of the lower registration fees.
The SEC was forced to slash its registration fees because its 1996 budget was caught up in the federal budget gridlock, which led President Clinton to close down nonessential parts of the government Tuesday.
Without a new budget, the SEC lacked authority to charge its regular securities registration fee of 1/29 of 1 percent of the total amount of stocks and bonds offered for sale. It was forced to revert to a lower fee of 1/50 of 1 percent of the total offering amount, an amount written into law.
Chrysler Financial Corp., the automaker's financing arm, registered $8 billion in debt securities in a so-called ``shelf offering,'' which means the securities can be sold from time to time when market conditions are best. The company saved $1.16 million by registering the securities during the budget impasse.
``We do the shelf registrations as a matter of business throughout the year,'' said John R. Ferry, a Chrysler Finance spokesman. ``This one was planned and ready to go. We were looking for the right time.''
The SEC takes in almost twice as much in fees as it spends in its annual budget, with the surplus going to the U.S. Treasury's general fund. The reduced fee meant a drop of $9.4 million in revenue that otherwise would be available to the Treasury, SEC spokesman Michael Jones said.
The SEC's estimate was for documents received up to 5:15 p.m., but the figure was expected to be higher.
``In the last hour, they had a deluge,'' Jones said.
Ferry defended Chrysler's decision.
``We pay millions of dollars each year to the government in filing fees for securities we sell. We're looking for ways to become more efficient,'' he said.
For other companies, the timing was purely coincidental.
``I wish I could take credit for being that brilliant,'' said Ian Campbell, senior vice president at Great Western Financial Corp., which registered $750 million worth of debt securities.
by CNB