TWO N.Z. LOANS

Auckland Star, Volume LXXV, Issue 304, 23 December 1944, Page 5

TWO N.Z. LOANS

REPAYMENT IN 1945

Conversion Considered More Probable Course !■ Rec. noon. LONDON, Dec. 22. The financial Press speculates about New Zealand conversion plans in view of New Zealand's large sterling balance. The city expresses; the view that much of this money will be required for restocking purposes after the war, and expects conversion rather than cash repayment of the £17,000,000 sterling of loans due for redemption next year. Little attention has so far been attracted by two New Zealand loans--which have to be repaid next year,.,, says the Financial News. They are £7,500,000 of 4i per cent stock and. £9,500,000 of 3 per cent stock. The market is wondering what the procedure will be, says the Financial News. It adds: "When attempting te assess the prospects of conversion or repayment, one naturally thinks first of the amount of cash there is in hand. New Zealand overseas assets total about £35,000,000, a rise of £7,500,000 over the year. Assuming, which seems to be fair enough, that the bulk of this consists of sterling, there would be plenty of money for., the cash payment of both issues. "All the same, there are a num-'.'", ber of possible reasons why cash repayment should not be undertaken. The present level of sterling balances is due to abnormal wartime circumstances. We have made bulk purchases of New Zealand's primaryproduce, but New Zealand has bp en unable to get many goods in return,-. - "After the war the Dominion may require much of the money for restocking purposes. Again,- financial arrangements between this country , t and New Zealand have not reached finality. In November it was mentioned In the House of Commons t , that the payment of sums due to the United Kingdom of up to £18,000,000 . might be deferred for adjustment. It is suggested by the Financial News that conversion is the more probable course of action.

When the terras of the trade agreement with Britain were announced at the beginning of August the Prime Minister statetl: "The United Kingdom Government has also agreed to payments toeing suspended under our Memorandum of Security up to an amount of £18,000,000 sterling, until after the war when the question of payment is to be reconsidered." New Zealand loans tailing due ixt London next year are as follow, the immints beinff in New Zealand cur rency—-£3,500,37-5, 34 per cent, due Janu--<. arv i; £249,375, 5 per cent, due February 15; £9,476,134, 4i per cent, due March 1, fl 9 071 600, 3 per cent, due April 1, 112 613 636, 4i per cent, due December 1 Also on January 1 of 1940, _ a loan of £16,1071638, bearing interest at 5 per cent* falls due.