Banks that serve as trustees on bond issues may want to share an interesting bit of news with their bond-issuing clients: they can save money on the process of bond calling.
January 1990 was the call date that the Alaska Housing Finance Corp. chose for redeeming $20,803,000 in Eurobonds issued in 1984. Under the terms of the indenture, AHFC would have had to run at least two advertisements in three newspapers-the eastern edition of The Wall Street Journal, The Financial Times of London, and The Luxembourg Wort-listing the 20,000-plus certificate numbers to be called.
Ross Risvold, management and financial information officer at AHFC, notes that the costs of advertisements in these three publications (usually full page ads), plus the added cost of financial publisher fees, results in "running up $500,000 bills." Added to that is the bother financial and otherwise) of printing errors.
Rather than start shelling out the big bucks, AHFC and its trustee, Bank of America, instead turned to Redemption Radar, a new bond redemption system from Fiduciary Communications Co. of New York. Using this system, AHFC bypassed the publishing route by providing Luxembourg-based Cedel and Brussels-based Euroclear, the two Eurobond depositories, with a computerized listing of all the certificates to be called.
"We think it would be easier, more cost-effective, and much more efficient for all parties involved if we sent the list of numbers we were going to call, " says Risvold. "They'd rather get it on a floppy disk than clip it out of the newspaper. This way, they tell us what they have and don't have, and we publish what they don't have. "
Bank of America determined which certificate numbers would be called, which were then sent to Cedel and Euroclear. Risvold says the depositories reported they held over 90% of the bonds in question, which allowed AHFC to publish a list of the outstanding bonds at a cost of $60,000; publishing the entire list would have cost $460,000.
The savings from the Eurobond redemption encouraged AHFC to use Redemption Radar again wi calling of 15,235,000 in 1980 Insured Mortgage Program Bonds. Bank of America served as bond trustee again and Depository Trust Co. of New
York and Midwest Securities Trust Co. of Chicago were the depositories. By being able to identify which bonds the depositories held prior to publishing call notice, AHFC saved about 10,000.
Money from the tube
Guests at Bally's Casino Resort in Las Vegas can now obtain extra cash without leaving their hotel room. Two local vendors-Valley Electronic Services Inc., a subsidiary of Valley Bank of Nevada, and Teleguide-have teamed up with Hospital Network of Green Valley, Nev., to create Casinocash, the first in-room credit card cash advance system in the U. S.
The new system allows guests to obtain money by using the television set and remote control device in their room. They enter their credit card number and amount of cash they want via the remote control. Graphics and instructions appear on the television screen while a voice assists in completing the transaction. When the transaction is completed, a map is displayed showing the casino cage where the money can be picked up.
The system currently accepts MasterCard, Visa, and Discover cards. Bally's management is …