THE LOAN.

Auckland Star, Volume LII, Issue 158, 5 July 1921, Page 4

THE LOAN.

I Of the five million loan placed by Mr. : Massey on the London market, the - underwriters have been left with 5S per j cent. Less than a month ago South {Australia went to London for three milI lions, and Tasmania for two millions, and the underwriters retained 72 and 57 per cent respectively. The interest in I each case was 6<l percent. Mr. Massey had | the advantage of issuing his prospectus - when the coal strike was being settled, ! and under the circumstances he cannot .' claim to have made a much deeper im"jpression on the investing public. Of ; course he gets his five millions, less disI count. While the Australian States i offered 6A per cent, he offered fi per cent " , with a maximum discount of four pounds. 1• It is stated that the underwriting j charges will amount to perhaps one per t cent or a little more, bringing the value Jto New Zealand of every £100 bor- : rowed down to £05. Wp notice, how--1 , ever, that in thp case of a recent Sydney i . loan thp underwriting charge was 2 per >; cent, and in the case of a Melbourne ■ loan 21 per cent. Evidently this is going J to bo an expensive loan, 'it Tias always -1 been Mr. Massey'a policy to try to keep • down thp rate of intorpst, and he sought i to attract investors by setting a dis- , count against the six per cent' offered, at a time when (31 was being offered for Government requirements. The terms 1 have not proved very attractive. Jud<*- - ing by the state of thp stock market here, lip might have raised the money at this figure in New Zealand, where'the rate of interest has been, and still is ; lower than in England. Such an operation, however, might havp seriously disturbed the market, interfering " witli issues made necessary by his own moratorium legislation. New Zpaland will . receive £5.000,000, less ,250,000, and pay 6 per cont on it, and the Government "ill apply a great portion of the money to a railway service that is not paying : its way with an interest charge" of . about 4 per cent. It is anything but a : cheerful outlook. " "" ,