A COMING CONVERSION.

Auckland Star, Volume LXVI, Issue 145, 21 June 1935, Page 6

A COMING CONVERSION.

In the present state of the London money market a saving amounting to at least £150;000 should be possible by the conversion, reported to be imminent, of £10,000,000 of New Zealand stock now at the point of optional maturity; The Dominion has had to wait for thi3 opportunity to take advantage of the favourable time for loan conversions, while Australia has been in - the fortunate position of having saved well over a million annually by converting about £100,000,000 of debt immediately following the fall in interest. Another New Zealand loan, amounting to \£ 5,800,000, will j come within the optional range next year, but after that four more years will pass before the maturity in 1940 of a total of Thus it appears that the opportunities for Dominion conversions in the hear future are few, and, of course, a wait of se'veral years might allow interest to rise.. SuchA rise, however, is not likely to be rapid. It has been contended, especially in the interests of local bodies with obligations to British bondholders, that an attempt should be made to -forestall the dates of optional redemption by asking the holders to agree to earlier action, but there are difficulties in the way. Britain herself has not attempted this with her pwn debt; neither have the other Dominions. Australia in every instance has had the right of contract. Any special concession sought by New Zealand would be regarded by bondholders as suspect because it would be watched by all other borrowers. If we succeeded, they would ask the same right. Besides, many of those who now hold the bonds have paid premiums for them, and the loss Would fall on the wrong shoulders. Mr. Forbes and Mr. Cootes no doubt have been inquiring as to the possibility of further savings, but it would be unwise to build great hopes on the result of their mission.