The Los Angeles Times from Los Angeles, California • 48

Cos Angeles (Time6 Business in Brief Selected Interest Rates AilHAufS tWU tUttStkjjtrj (Hi I 2 Part IV Monday. August 1482 SWAP: Loophole building a lirewt rv Colorado, I hi-headquarters of Attolph I'oors Co Braniff wants to end pension plans for 9400 ex-employees. Braniff Airways Inc. made ihe request to a federal bankruptcy judge, slating that the grounded airline's pension fund doesn't have enough money to meet all lis obligations If granted, the federal Pension Benefit Guarantee Corp. would have to subsidize the fund.

A spokesman for the federal agency said the required subsidy might be $70 million or more, well above the largest pension bailout thus far of $60 million. 400 Market Basket workers were not hired by Ralphs. Ralphs which assumed ow norship of Hi Market Basket stores this week, ai-knowledged thai il hirotl 1.C.00 of the former v. ho ore employ ihI al the Markel Basket out It-is. A Ralphs siKiki-sman said fewer employees wore in-t'ilt-d because t)f ilifft-rt-iu operating procedures at Ralphs.

Many of the AM loft jobless are bak -ers ami meat cullers. Ralphs, unlike Market Basket, operates central meat -culling ami bakery opera -uons. The Ralphs spokesman said, however, thai as sales built at ihe various former Market Basket stores, the chain may seek additional personnel. 19 I I I 1 i tit lit! 'mrwj! AJ 1 n' Kom miutt jjr" T- I tlitTtll 1,1 1 i ii I 1911 I A A 1112 Iht- Sahara Tahoe in Slaleline ami the Nevada Club in 1-aughlin. and a 50''; interest in an Atlantic City casino.

A cardinal sharply criticized the Vatican Bank's president. Remarks published in the Roman Catholic weekly II Salulo referred to the bank's links to Italy's Banco Ambrosiano. which was forced into liquidation Aug. t. They were made by Cardinal Giovanni lit-nelli.

former Vatican deputy secretary of stale and once a leading papal candidate. Bunco Ambrosiano is partly owned by the Vatican Bank, headed by American-lwrn Archbishop Paul Marcinkus. Without naming Mar-cinkus. Bt-nelli was quoted as saying: "If there was any imprudence, it was because of incompetence and inexperience." Under Marcinkus" predecessor, he continued, "everything was tranquil." Marcinkus has been summoned to testify in the scandal. SAP said Lombard-Wall bonds appeared safe from default.

Standard Poor's the major rating agency, said a preliminary review concluded that municipal bonds tied up in bankruptcy proceedings of the Lombard-Wall Inc. securities firm were secure enough to require no lowering of credit ratings. A day earlier, the other major rating agency. Moody's Investors Service suspended its ratings on eight bond and on 30 note issues as a result of certain transactions with New York -based Lombard-Wall and its Lombard-Wall Money Markets Inc. subsidiary.

The action affected six issues of the New York Dormitory Authority and issues in 1 1 other states. Anheuser-Busch picked a possible plant site. The St. Louis-based brewing company selected Fort Collins as the location of a future brewery provided it decides to build one in Colorado. At the same time, An-heuser Busch discontinued discussions with two other cities in the state as possible locations for a new plant.

Last summer, the brewing firm disclosed its possible interest in Yields on Selected Securities AVERAGES Of DAILY RATES ENDED FRIDAY Members of the Oil Chemical and Atomic workers signed a contract agreement, ending a seven-month strike of 4.000 employees of the Texaco refinery in Port Arthur. Tex. Moody's Investors Service lowered ratings on some bonds and debentures of Marathon Oil and its subsidiaries; the revisions were based on the announced intent by U.S. Steel to guarantee certain of the outstanding debt of Marathon Oil, its wholly owned subsidiary, and Marathon's subsidiaries Republic Los Angeles, said final net income for the year ended July 31 is estimated at $7 million; the name of the company was incorrect in the Friday Times Sciences, El Segundo. said it received a letter of intent from the General Petroleum and Mineral Organization of Saudi Arabia for a three-year computer contract estimated at S20 million Warner-Lambert completed its acquisition of IMED.

San Diego Electric plant production was 445.6 million kwh in the week ended Aug. 14, the Department of Water and Power reported OPEC's Market Monitoring Committee has reaffirmed the cartel's basic price structure and a production ceiling of 17.5 million barrels a day Gulf Western Industries said in an SEC filing that it raised its holdings of Libbey -Owens-Ford stock to 29.5 AEG-Telefunken, based in Frankfurt, West Germany, said il is proposing to end production at its Brunnenstrasse plant in Berlin as part of its struggle to regain Anti-inflation policies are essential, the IMF said. Despite the deep economic suffering resulting from the industrial nations' slow-moving battle against inflation, the effort should be continued, the International Monetary Fund said in its annual report. The 146-nation lending organization urged governments to stick to their restrictive anti-inflation policies rather than turn to politically popular measures that might induce a fleeting prosperity in the short-term but even worse problems down the road. The fund also acknowledged that 1982 is shaping up as a year of poor economic performance around the world.

Del Webb completed the sale of the Sahara Vegas casino. Debt -burdened Del E. Webb Phoenix, said the $50-million sale of the flagship of its shrunken casino empire is part of the financial restructuring program begun a year ago. The new owner. Paul Lowden.

once a Las Vegas lounge musician, also owns the Hacienda hotel-casino on the Las Vegas Strip. In 1972. Lowden became a part owner of the Hacienda when it was bought by Allen R. Click, who later owned the Stardust and Fremont until he was stripped of his casino license in a skimming scandal. Webb previously sold its Sahara Reno.

It still owns three other Nevada casinos, the Mint in Las Vegas, Conllnurd from Flrtt Pa(e Mil UK a- fur Itic i .1 a i. Hut ili)ili- lhi- n-k. I a ami lurK''. 1 th- i h.r.i- v. I pr for lh- tunk )ijttiiiK Ihcin ih.

111 Vlt Illfllt thlllk llllll I MM 'if A I iNMJtil slink's prill- fur M-lliMi! i' "h-i: plus Ihrv oflt-i. ilnim up tht- tni-nn -j niK now invi-sliiH-nis tn lhi- furmi hnlri-r- nf iiha retired debt Swaps arry several Ix-m-fil for ihe i uinp.i!. r- i make them First, they shore up lialaiii heet Iv, replai inf i with equitv. Salomon's Fos explains thai iha' fe.i' has lecome particularly atlraetive in an era 'Ah-i, firms are considered ilaiinerotisU overlevi r.ir il are paying an average of 40' of their pre tax profi' --service outstanding debt Others say. however, that the balance-sheet are largely cosmetic.

They point out that it is no! 'r. type of debt that is being exchanged older i small interest payments that causes trinibie.i firms their biggest problems. Companies are. in effi unloading their "best" debt. Criticized as 'Gimmickry' Abraham J.

Bnloff. accountancy professor at ihe ruch College of the City I niversity of New York arid leading critic of the profession, descnlros the gains 'ha' result from retiring low-intercsi debt as "gimmickr. that "certainly doesn't belong in income." Companies, he says, are recognizing today the s.r. -ings that they would otherwise realize by paying off old debt in the future at lower-than-markct rates. As such, he contends, the gains should be spread over those years, rather than be recognized in a single quarter But analysts unanimously acknowledge thai the benefits of such swaps are attractive.

"Here we have a way to swap equity for debt rha' seems to be pretty cost-efficient." says William Sahl-man. an assistant professor of finance at Harvard Business School. "An awful lot of finance has to do with taxes." Not surprisingly, the companies that have done such swaps are among their most avid supporters. 'Much Stronger Position' "Il put us in a much stronger position." says Charles A. Markel.

assistant treasurer of Duke Power Co. in Charlotte, N.C. "Investors would view us as a stronger company." In what ranks as the third-largest swap ever. Duke Power exchanged common stock worth S7R.3 million for debt that carried a face value of $1 19.9 million and averaged 7 interest. The one-time gain was almost $50 million, Markel says.

but. more important, it increased the equity portion of the company's capital to 41 from 39 and relieved it of about $9 million in annual interest payments. While the popularity of such swaps is growing, "we certainly have not been recommending them to every company." says First Boston's Einiger. "I think it's-clear they're not for everyone." "It's a market-timing call, pure and simple." says Lloyd McAdams. chief executive of Security Pacific Investment Managers, a unit of Los Angeles-based Security Pacific Corp.

Analysts say that investment bankers have, in their haste to accumulate old bonds, overpaid the holders in some cases. Similarly, if interest rates rise higher, the price of outstanding bonds will fall further, making today's swaps look less attractive. May Be Diluting Earnings Companies, too, may be issuing stock when its price is unusually low, in essence giving away more equity than they should and diluting the earnings of present shareholders. Whenever a company issues new stock, its income is spread over a larger number of shares and its closely watched earnings-per-share ratio may drop. Proponents of swaps, however, say that earnings dilution is often offset by the advantage of having a better debt-to-equity ratio.

Investors, they say. are willing to settle for lower earnings per share in exchange for an investment that is less risky. To ease some of the potential problems, investment banks are coming up with new forms of swaps. First Boston, for example, has begun arranging what it calls "leveraged debt-equity swaps," through which clients may repurchase debt through a combination of newly issued stock and cash. The advantage, it says, is that such deals retain the tax-free feature of other swaps, but lessen earnings dilution.

Companies also are turning to other methods of wiping debt from their balance sheets. Exxon for instance, retired $515 million in debt by giving a trustee, Morgan Guaranty Trust government securities worth $312 million. Morgan Guaranty will use the income from the secur- Please see SWAP. Page 3 1 ji" I 1 Spirt 1 MIMCIPU. )a IDMDS i I II 111 I 1 A SO ROJF MAMJ JA 1981 1982 New Issue Calendar Source Federal Reserve Bank.

St Louts Bona Buyti Avtraoe. Tnursttiy Dili Common Stock Appr ox Arm. Issuer and Symbol $16 25 million Heathdyne Inc tHDYN' Managar Listings (Runs Books! OK R.itMi' No of Shares 1 i.KWJ IJUO Data Au J4 RACKETS: Battle Corporate Bonds Preferred Stocks Managar Data Moody's Amount Issuar Security Maturity (Runs Books) A.l.l AAA Frf si Honw CrPd'1 B'ir1. 1'IHH Bn'til' Corp AinlJS 1 $30 million PuBlic SovkpCo ol P1 P-it -1. New Hampshire nl B.w 2 BBB million Molid.lv Inns Inc Notes Aikj SnnU i'-i', Aug 21 A 1 A St2bm.ll.on Houston LiqMmq 8, FMB Ann.

1 12 Power Co Auq.23 AAA S'OOmillion Republic ol Finland Notes Septl'IH Metnll Aik)23 2 AA SlbOmillion Sun Company IrK rDs Auq 23 A3 A $4(J0miltion United States Steel Pd Corp Souk B.lteman li( hler Hill Ric hards Continued from First Page specialty tournaments and has an aggressive and innovative advertising program. "We have a unique product, and we'll just stress that rather than attack our competitors by name as they are doing." Long says. Prince says it now has almost 40 of the quality racket market and AMF-Head has about 24. The rest is split among Wilson. Donnay and Dunlop.

"When you're No. 1 you're always under attack," Long says. But AMF-Head has the price advantage. Its rackets sell for about $50 below those of Prince. While Prince rackets start at $65, its top graphite sells for $295.

The graphite Director has a retail price of about $250. So far. the companies haven't begun to bid against each other for endorsements from the really top names in the world of tennis. But Litke acknowledges that such endorsements would be worth a great deal of money. Now.

with the takeover by Chesebrough-Pond's, the once small Prince would seem to have a great deal of money to throw into the marketing fight. Continued from First Page "Obviously, if you make a variable-rate loan and you know the first rate adjustment will be sharply downward, you might want to think about making a fixed-rate loan," Frank said. But that's likely to leave the consumer in a quandary unsure whether to take a predictable fixed-rate mortgage at a higher rate on the gamble that rates will rebound and it will become a bargain or a volatile adjustment-rate loan at a lower rate on the bet that it will be cheaper in the long run. Some lenders already are limiting themselves to making fixed-rate loans but for another reason. These loans are the easiest to sell in the so-called secondary market, where investors purchase loans for investment purposes.

But the largest secondary markets are two quasi-governmental agencies: the Federal National Mortgage often called Fannie Mae, and the Federal Home Loan Mortgage known as Freddie Mac. And for a loan to qualify for purchase by one of them, it may not exceed 107 .000 a relatively paltry sum in light of California home prices. Despite the uncertainties and difficulties, savings and loans and other lenders nonetheless are encouraged by the falling prime rate, the booming stock market and the prospect of a somewhat reduced federal budget deficit as a result of impending tax increases. "The direction, the trend is very attractive." said Christopher of Home Fed. And.

on Friday, additional lenders joined the downhill trend. Gibraltar Savings Loan a Los Angeles-based among the state's 10 largest, reduced its price on a fixed-rate. 30-year loan with a S107.000 maximum to 15 from 16.5. In Sacramento, Capital Savings Loan moved its prime mortgage loan with the same terms to 15.25 from 15.75. Meanwhile.

Frank was confident that wherever rates settle they will be lower than recent experience. Asked what he would tell a consumer who called Thursday to ask about First Nationwide's current rate, he said: "We'd tell you to call back in a few davs. The rate would be lower." June -June 12 mos. 7.1 12 mos. 3.6 Year ago 87,292 Year ago 8.4 Year ago 1,040 Year ago 100,864 Year ago 7.2 Year ago 349 Money Market Funds Assets of the 202 money funds reported by Donoghue's increased $3.5 billion to $220.85 billion for the week ending August 18.

1982. The money funds' 7-day average yield decreased to 1 1.38 from 1 1.52 The funds' 30-day average yield fell to 1 1.85 from 12 23. The funds average maturity figure increased one day to 37 days. Money funds with assets of S100 million or more that are available to individual investors. For period ended August 18.

1982. 7-day 30-day Avg. Avg. Yield () Yield IKI 7-day 30-day Avg. Avg.

Yield () Yield 1) Avg. Maturity Assets Fund LEHMAN 106 103 12.5 Trends in the Economy General Indicators Index of Leading Indicators June May Change, monthly and year to year, in 0.9 0.9 Consumer Price Index June 3 mos. Change, annual rates, in 13.3 9.3 Producer Price Index (finished goods) July 3 mos. Change, annual rate, in 7.1 6.8 Retail Sales July June Billions of dollars 88,723 87,887 Auto Sales (domestic and imports) July June Millions of units, annual rate 7.5 7. 1 Housing Starts July June Thousands of units, annual rate 1,21 1 906 Employment July June In thousands 99,732 99,764 Unemployment Rate July June As of work force 9.8 9.5 Latest wk.

Prior wk. Business Failures 494 512 Production Industrial Production Index July June Change, monthly and year to year, in Steel Latest wk. Prior wk. Thousands of net tons 1,207 1,257 Autos Latest wk. Prior wk.

In units 72,878 Electric Power Latest wk. Prior wk. Millions of kilowatt -hours 46,285 49,136 Oil Imports (crude and products) Latest wk. Prior wk. Thousands of bblsday, average 5,065 5,505 Domestic Crude Oil Aug.

July Thousands of bblsday, average 8,645 8,701 Finance Dow Jones Industrial Average Latest wk. Prior wk. Friday close 869.29 788.05 Prime Rate Latest wk. Prior wk. Most major banks, in 1312-14 14Vi-15 Federal Funds Rate Latest wk.

Prior wk. Average, in 10.11 10.90 Discount Rate Latest wk. Prior wk. In 10V 10V4 Three-Month Treasury Bills Latest wk. Prior Wk.

Rate in 8.616 10.025 Six-Month Treasury Bills Latest wk. Prior wk. Rate in 9.821 10.94 Moody's Corporate Bond Composite Latest wk. Prior wk. Rate in Thursday close 14.78 15.42 Gold (London) Latest wk.

Prior wk. Friday p.m. fixing, per ounce 384.75 338.50 Money-Supply Growth 3 mos. 6 mos. M1.

annual change, in 0.4 1.8 Estimated Ravisad NA-Not Avail. July-July Year ago 2,273 Year ago 107,389 Year ago 49,262 Year ago 5,787 Year ago 8,574 11 7 90 13 8 11 3 11 7 11 2 11 6 12 1 11 1 20 6 22 0 12 2 11 4 20 5 18 3 10 0 11 7 12 3 11 8 10 9 12 6 12 3 130 120 12 I 94 11 9 10 9 12 6 11 6 10 3 9 7 10 0 12 1 120 11 0 10 7 106 105 11 9 11 4 12 2 12 0 II 9 130 11 9 11 8 11 6 11 7 12 2 12 7 10 5 12 4 11 9 23 6 28 21 28 17 36 32 29 39 47 40 28 47 22 44 39 37 35 29 33 36 31 29 42 39 42 17 27 33 32 28 15 20 49 47 37 44 34 26 33 33 31 39 31 28 36 25 34 28 29 29 32 33 37 Cash Management 767 1 -Gov't Fund, Inc 183 9 Lexington Money Market 360.7 Liquid Capital Income Trust 2,218.8 Liquid Green Trust 148 3 Lord Abbett Cash Reserve 391 3 MIF-Natwnwide 480 7 Mass Cash Management Trust 1.003 9 McDonald Money Market 208 8 MERRILL LYNCH CMA Gov't Secunties 1418 1 CMA Money Fund 1 4 905 3 -Government 2,180 0 -Institutional 1.752 3 -ReadyAssets 22 957 6 -Retirement Res 681 5 Midwest Income ST Gov't 2719 Money Market Instruments 164 9 Money Market Management 540 0 Morgan Keegan Daily Cash 1173 Mutual of Omaha 496 5 NEL Cash Mgt Trust 822 0 National Liquid Reserves 2 036 0 OppenheimerM M.F.,lnc 1,735 4 Paine Webber Cash Fund 6.799 5 Putnam Daily Div. Trust 402 8 Reserve Fund-Gov't 439 7 Reserve Fund-Primary 3.048 6 RothschildlL.F 299 6 St. Paul Money Fund. Inc 209 5 SCUDDER -Cash Inv Trust 1 348 0 -Gov't Money Fund 168 2 SearsU Gov tM 466 6 Security Cash Fund 103 7 Seligman Cash Mgt Fund Inc 849 2 SHEARSON-AMERICAN EXPRESS -Daily Dividend 6 244 1 FMA Cash 117 8 -FedFund 1 452 0 Government Agencies 1.101 1 -T-Fund 759 7 -TempFund 5 855 9 Short Term Income 256 9 Standby Reserve Fund 2119 SteinRoe Cash Reserves 934 7 Sutro Money Market Fund 1 94 9 T.Rowe Price Pnme Reserve 3.593 7 Transamenca Cash Reserves 379 0 Trust-Cash Reserves 233 5 Tucker Anthony Cash Mgt 378 5 USAAM.M.F 168 4 United Cash Management 5648 Value Line Cash Fund 706 4 VanguardM Federal 573 5 Vanguard Prime 1 280 3 Webster Cash Reserve 1 463 6 Ziegler Money Market 152 1 Donoghue money fund average 1 Averages for all 202 taxable fundsl 12 4 9 1 13 6 12 4 12 4 11 9 12 8 12 7 11 6 14 4 15 7 11 8 12 2 15 1 14 1 10 3 12 3 12 7 12 5 11 8 130 12 9 13 1 12 8 12 8 9 7 12 7 12 2 130 12 2 10 7 10 3 1 1 1 12 6 12 6 12 1 11 2 11 0 1 1 0 12 6 1 1 9 12 8 12 6 '2 3 13 7 12 3 12 4 5 12 6 13 0 13 4 1 1 3 13 1 12 5 12 5 1 1 9 Avg.

Fund Assets Maturity AARP US Gov't M.M.T 4.636 0 47 Ale. Brown Prrme 632.7 33 ALLIANCE GROUP -Caprtal Reserves 1.580.5 29 -Gov Reserves 265 3 27 American General 405.2 37 American Liquid Trust 389 6 28 BIRR Wilson Money Fund 123.3 21 BACHE GROUP -ChancellorGov't Sec. Trust 384 5 38 -Moneymart Assets 3.939 6 29 Boston Company Cash Mgt 368 3 39 Capital Cash Mgt Trust 187 3 24 Capital Preservation 2.132 0 33 Capital Preservation Fund II 1.169 0 3 Cardinal Gov't Securities 374.7 18 Carnegie Gov't Secunties Trust 241.1 II Cash Management Trust 736.5 25 Columbia Daily Income 959 1 28 Composite Cash Management Co 360.8 26 Current Interest 1.625 7 36 0REXEL8URNHAM LAMBERT. INC. -Cash Fund Gov't 146 3 33 -Cash Fund M.

Port 1.062 1 36 Daily Cash Accumulation 5.456.4 26 Daily Cash Gov Fund 1312 27 Daily Income 792 1 30 DEAN WITTER -Active Assets Gov Sec 140 1 24 -Active Assets Money Trust 1 002 4 48 -InterCapital Liquid Assets 9.483 1 51 Delaware Cash Reserves 2.398 5 40 Dollar Reserves 125.4 17 DREYFUS -Liquid Assets 10.582 0 38 Gov't Securities Series 817 .5 53 ED Jones Daily Passport 904 4 39 HUTTON Cash Reserve Management 7.142.9 27 -Hutton Gov Fund 400 0 45 EGT Money Market Trust 177 2 39 Eaton Howard 285 9 29 Equitable Money Mkt Account 394.5 35 Fahnestock Daily Income 163.1 28 FIDELITY GROUP -Cash Reserves 4.082 2 33 -Oairylncome 3.912 9 35 -USGovtRes 4149 38 Financial Daily Income 302 0 21 First Investors Cash Mgt 664 1 30 First Variable Rate 1.482 4 24ll Franklin Federal 179 5 6 Franklin Money Fund 1.292 3 30 Fund-Gov't Investors 1.428 0 14 General Inc 128 2 54 Government Investors Trust 766 8 25 Gradison Cash Reserves 787.0 33 HilliardLyonsCM.Inc 226 1 10 IDS Cash Management 1.352 3 32 Partway Cash Fund 797 3 26 John Hancock Cash Mgt 760 5 19 KEMPER -Cash Equivalent Fund 4 467 9 38 -Cash Equivalent Gov Only 571 6 21 -KemperGov'tMoneyMarfcet 135 5 21 -Kemper Money Market 3.894 6 38 Legg Mason Cash Reserve Trust 354. 1 44 13.0 12 2 102 130 12 3 133 11.0 132 12 7 12 4 112 9 7 106 102 12 3 120 12 9 12 5 10 1 13 1 12 6 96 118 98 12 9 12 9 12 9 13.1 13 2 10 7 12.7 136 106 12 7 12 5 12 8 12 3 13 1 130 107 12 3 12 6 12 1 9 7 130 111 12 3 119 12 7 10 1 130 12 8 11.7 13 7 103 102 13 9 126 114 99 12 3 11.4 129 103 126 118 115 103 95 99 96 11.1 11.3 12 3 119 98 12 6 118 93 11.4 93 12 3 12 5 12 5 125 130 106 122 138 104 120 116 12 2 119 12 5 124 103 109 120 114 93 12 4 103 118 110 120 99 123 122 108 13 1 98 95 13 1 119 Year ago 920.56 Year ago 20 Year ago 18.19 Year ago 14 Year ago 15.705 Year ago 15.644 Year ago 15.53 Year ago 429.50 12 mos. 5.2 2 California Firms Will Drill Off Chinas Coast Atlantic Richfield Los Angeles, and Santa Fe International Alhambra. said they agreed with the China National Offshore Oil Corp. to explore for and produce oil and gas in a large block in the South China Sea.

The offshore area is south of Hainan Island and is part of the same area where Arco and Santa Fe conducted seismic and geophysical studies and operations under an earlier agreement with China. 1 1 4 37 Yields represent total return to shareholders for past seven and 30 day periods Past returns not necessarily indicative of future yields Investment quality and maturity vary among funds Ul average term to next rate-adiustment date Reprinted in condensed form with permission from Donoghue Money fund Rppon of Holliston Mass 01746 617 429 5930.