£9,840,000 LOAN

Auckland Star, Volume LXXV, Issue 31, 7 February 1944, Page 4

£9,840,000 LOAN

CONVERSION OFFER

TERMS ARE ATTRACTIVE

Applications are being invited by the Reserve Bank, on the authority of the Minister of Finance, for the conversion of £9,810.855 in Government stock and debentures maturing on February 15, 1913-10. and bearing interest at -1 per cent. Copies of the prospectus were received in Auckland this morning. Holders who convert will receive new securities of the same nominal value, plus a premium, which is a new feature in conversion loans.

The new stock will consist of a 3 per cent issue maturing on April 15, 1960-63. and carrying a premium of i' 3 per cent, and a 2J per cent issue maturing on April 15. 1949-51, and carrying a premium of £1 per cent. The Government intends to repay securities not converted at par on May 15 next. The conversion offer opens on Friday next and closes on Saturdav, March 11.

It is pointed out that the offer is a pure conversion one and cash payments to adjust premiums due on conversion or to increase holdings will not be accepted by the Reserve Bank.

Interest accruing subsequent to February 15, 1944, on the convertible securities will be calculated up to and paid on May 15, 1944, after which interest will cease. Interest payable for any period of less than the full half-year will be calculated on a daily basis and will be paid by interest warrants. All premiums on conversion.. will be met by the issue of securities in the new loans for amounts of £5 or multiples thereof. Interest on the new securities will be paid on April 15 and October 15, and the first payment will be made on October 15 next.

The annual interest payment on the loan has been £393,563.

The stock which is the subject of conversion sold on the Auckland Stock Exchange to-day at £102 15./, which gives a yield, allowing for redemption and accrued interest, of approximately £3 2/S. The new 3 per cent stock, including the premium of £3 per cent, will give a return of approximately 1/ higher.

"The terms of the conversion are most generous, and should be very well received by the investing public," said Mr. W. B. Colbeck, acting chairman of the Auckland Stock Exchange, asked to comment on the operation this morning.