LOCAL BODY LOANS

Press, Volume LXXXVIII, Issue 26692, 28 March 1952, Page 6

LOCAL BODY LOANS

DIFFICULTY AT 3{ PER CENT. BIG CAPITAL ’WORKS INVOLVED Local bodies in and around Christchurch are having some din.cuity in raising loans at the 3j per cent, maximum rate of interest at present fixed by the Local Government Loans Board. Those with the biggest capital works programmes are affected most, though in a few cases early arrangements have saved embarrassment. There are counties which count themselves fortunate that they have no loan proposals requiring immediate attention. Uncertain delivery of goods has complicated loan arrangements. When shipments were not assured last year, some of the bodies deferred raising loans to save interest. A few just managed to get their requirements at the fixed rate recently, and others have been caught by the stiffening resistance.

The Christchurch Transport Board’s big modernisation loan is being raised m two parts. The first of £375,000 was obtained at 31 per cent, in lots of £300,000 and £75,000. The second part of £120,000 is now being negotiated, and it is hoped to secure the whole amount at the approved interest.

The Christchurch Drainage Board, which has always tried to offer its loans to private investors rather than to the big lending institutions, has had a ready response up till the last few months, when more difficulty was experienced. Of the relief sewer loan of £425.000 so far only £20,000 has been taken up. and of the £172,000 remainder of the New Brighton loan about £90,000 has still to be raised. The Lyttelton Harbour Board also has loan problems, and a special report on them will be presented to the next meeting. The Christchurch City Council has a £93,800 reserves extension and development loan, of which about £ 29,000 has so far been raised. It was opened just before Christmas. Various other waterworks loans are filling slowly. The special loan of £49.400 for housirfg of the aged was secured from the State Advances Corporation under the Government’s scheme for assisting such undertakings. The Riccarton Borough Council is another body which normally issues Srivate debentures, and It has also felt le hardening money market with under half of its £46,000 waterworks loan raised. Previously there had always been a steady inquiry for giltedged investments on behalf of estates. The Lyttelton Borough Council succeeded in raising its loan of £30,000 for water and sewerage at Diamond Harbour with an insurance companyjust before present difficulties appeared. The Heathcote County Council secured a loan of £13.200 for Heathcote Valley reticulation in one debenture from a commercial agency, but some “O’i.hts are held about getting the £ 30,000 Aranui water reticulation loan at 3j per cent. „ The Waimairl County Council has had no recent loans, and it is hoped to avoid them by the recent creation of a bridge renewal fund. The Paparua and Halswell County Councils have no immediate loan requirements.