bonds

1830 EXPANSION
Bonds - Rules for Debt
Ver. 1.11
Copyright John Puddifoot, 1993

Please Note: This is an expansion and addition to the Avalon Hill Game, 1830. Ownership of Avalon Hill's 1830 is required to use the rules presented herein.

INTRODUCTION
These rules bring to 1830 a new dimension: corporate debt. Each company may now issue and/or redeem debt during each of its operating rounds. Additionally, players may now purchase this debt during the stock round.

The company operating round sequence is modified as follows:

1. AT ANY TIME DURING THE RAILWAY'S OPERATING ROUND SEQUENCE, ISSUE ONE AVAILABLE CLASS OF BONDS TO THE BANK POOL AND ADD THE DISCOUNTED VALUE AMOUNT TO THE ISSUING COMPANY'S TREASURY.

2. Lay Track.

3. Place Token.

4. Run Trains.

5. Collect income / pay dividends.

6. PAY DEBT INTEREST ON BONDS NOT ISSUED THIS OPERATING ROUND.

7. ON THE OPTION OF THE COMPANY PRESIDENT, REDEEM ANY OR ALL OUTSTANDING BOND ISSUES AT FACE VALUE PLUS A REDEMPTION CHARGE EQUAL TO ONE INTEREST PAYMENT.

8. Buy trains.

The various new phases (IN CAPITALS ABOVE) are explained below:

AT ANY TIME DURING THE RAILWAYS' OPERATING ROUND SEQUENCE, ISSUE ONE AVAILABLE CLASS OF BONDS TO THE BANK POOL AND COLLECT DISCOUNTED VALUE AMOUNT:

Each company has five classes of bonds available for issue yielding differing rates of interest as outlined below. Each bond certificate has a face value of $100.

Class Certificate	#	Interest Rate	Face Value	Discount Value	Interest Payment	Interest/Certificate	Phase Available
A	1	10%	$100	$90	$10	$10	1
B	1	15%	$100	$85	$15	$15	2
C	2	20%	$200	$160	$40	$20	2
D	3	25%	$300	$225	$75	$25	3
E	2	30%	$200	$140	$60	$30	3
TOTAL	9		$900	$700	$200

Only one class of bonds may be ISSUED during any one company's operating round. (Classes that have already been issued may not be reissued until redeemed, see below.) Only class "A" bonds are initially available, classes "B" and "C" become available when the first three train is bought, and classes "D" and "E" become available when the first five train is bought.

When a class of bonds is issued, the company places ALL the bonds of that class into the Bank Pool and takes the Discount Value of that bond issue from the bank and adds it to the company treasury. The company may then use this money to pay for any expenditures of the company, including debt servicing costs incurred that round, at the dubious discretion of the current president.

PAY DEBT INTEREST:
During this phase, the company must pay TO THE BANK the indicated interest payment(s) for all bond issues of that company outstanding at the beginning of the current operation round. (See the table above for amounts.) Bonds issued during the current operating round are exempt from this payment. The current president of the company is required to make up any shortfall in the same manner as if the company were to have insufficient funds to buy a train. The holders of the bonds will not collect this interest until the end of the current operating round.

ON THE OPTION OF THE COMPANY PRESIDENT, REDEEM ANY OR ALL OUTSTANDING BOND ISSUES AT FACE VALUE PLUS REDEMPTION CHARGE:

During this phase, the company president may elect to redeem any or all outstanding bond issues. Each issue redeemed must be redeemed in full, all outstanding certificates of that class must be turned in and paid for from company funds. A payment is made to the bank from the company treasury of the total face value of the bond issue plus an additional interest payment as a redemption charge. For example, redeeming outstanding class "E" bonds would cost $200 for the face value certificates, plus a $60 redemption charge for a total payment of $260. Each holder of the class would then turn the bonds into the company and collect the face value plus TWO final interest payments from the bank. In our example, this would be $160 per certificate: the face value, the accrued interest, and the redemption charge. Bond classes that have been redeemed may be reissued at a later date should the president so wish. A player holding a bond issue must redeem it at the request of the president. The president may not finance a bond redemption from his personal holdings, the cash for the redemption must be in the corporate treasury. Note that the round they are redeemed, bonds effectively pay double interest: the regular interest plus the redemption charge. You may issue bonds in order to gather sufficient funds to redeem bonds.

COLLECTING BOND INTEREST:
After ALL companies have completed the operating round, each player collects the appropriate accrued interest due to him from the bank. The game then proceeds as normal into either another operating round or a stock round. Note that if this phase is not reached because of the game ending in a bankruptcy, the bond holders will loose any accrued interest not yet paid.

STOCK ROUND CHANGES:
Each player may now purchase, in the place of the regular stock certificate purchase, one bond certificate. there is no limit on the number of bond certificates that may be sold during any one player's round. Bond certificates are always bought from and sold to the bank pool at $100. Bond certificates DO NOT count towards maximum certificate limitations. There is no limit on the number of bonds that may be in the bank pool. The sale or purchase of bonds has no effect on share prices.

FINAL VALUATION CHANGES:
At the end of the game, each bond is valued at face value: $100. Further, the value of all company share certificates is reduced by $10 per outstanding bond of the issuing company. For example, due to skillful machinations of the B&O president, the B&O ends the game at $350 per share. However, the B&O also has all nine bonds issued and outstanding. For valuation purposes, the B&O is only worth $260 per share. ($350 - 9*$10 = $260)

Should the game end with a bankruptcy, all bonds of the COMPANY that triggered the bankruptcy have a face value of zero. Note that bonds DO NOT pay interest to the players during the operating round a player goes bankrupt and the game ends. (Exception: bonds that have been redeemed that round.)

DESIGNER NOTES:
These rules came about to add some fluidity to 1830. Too many times players in our group were just a few dollars short of buying a critical train, or didn't have the $100 to place that crushing token. In the 'real' world, loans and other forms of debt would be easily available to companies like those in 1830, so we added rules for it. This is now the standard version we play simply because it adds so much.

Initially, we expected these rules to slow down the game. In fact, they sped it up. Trains go very quickly, and fewer non-intentional bankruptcies occur; at least after you've played a few times with these rules. Company presidents have much more flexibility in what they can do. Before these rules, if the company had no money late in the game to place a token or lay a water or mountain hex, it just didn't happen because of the cost to the president in both lost share value and dividends. Now the president can just toss out a minor bond.

The people responsible for this expansion set are as follows:
Designer: John Puddifoot
Original Concept: John Puddifoot and Ron Kessler
Playtesters: Bill Dixon, Greg Jones, Mike Massullo, Gordon Waddington, Al Pedersen, Grant Elgard, Robert Taylor-Smith, Ian McCandish, and other fevered members of the University of British Columbia Wargaming Society.

1830 is a trademark of Avalon Hill
The Reading Railway is a variant from the General Magazine
The Norfolk and Western is from the Coalfields variant.

Rules by John Puddifoot.
Posted by Chris Acreman [72747,3060] with Mr. Puddifoot's permission.

Updated 14 Jan 08.

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