The Feasibility of Small Denomination Consumer Note Issues as a Source of Funds for Non-Financial Borrowers

Dramatic increases in interest rates have caused businesses to explore less traditional forms of financing in an effort to minimize capital costs. Early in 1976, a Vermont utility started to examine the possibility of raising short-term capital through the direct sale of securities to the household...

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Bibliographic Details
Published inFinancial management Vol. 10; no. 4; pp. 41 - 53
Main Authors Gatti, James F., Mills, John R., McTague, Peter J.
Format Journal Article
LanguageEnglish
Published Albany, N.Y Financial Management Association 01.10.1981
Financial Management Association International
Blackwell Publishing Ltd
Subjects
Bank credit
Bank loans
Bank rates
Banking regulation
Business structures
Capital costs
Case studies
Cash
Certificates
Corporations
Design
Financial analysis
Financial instruments
Financing
Fund raising
Innovations
Interest
Regulation Q
Sales of securities
Short term
Strategy
Treasury bills
Utilities
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Summary:Dramatic increases in interest rates have caused businesses to explore less traditional forms of financing in an effort to minimize capital costs. Early in 1976, a Vermont utility started to examine the possibility of raising short-term capital through the direct sale of securities to the household sector. This article reports on the planning and issue of the 360-day small denomination securities to consumers in 1979. Results show savings in interest expenses and the possibility of a greater market for the notes than had been anticipated.
ISSN:0046-3892
1755-053X
DOI:10.2307/3665218