NEW STATE LOAN

Press, Volume XCII, Issue 27782, 6 October 1955, Page 12

NEW STATE LOAN

Minister Gives Details

£10,000,000 TO BE RAISED Subscription lists for the Govern-m-nfs 1955 national development loan of £10,000,000, which was announced in the Budget, would open next Wednesday and close on November 16, the Minister of Finance (Mr J. T. Watts) announced last evening. He said it was one of the smallest loans floated since the Second World War. The money was needed for capital works and to carry out the Government’s programme of developing the country’s resources, in order to meet the present and future needs of an increasing population, the Minister said. In fixing the amount of the loan, the Government had been careful to maintain equity of Government, local body and private capital requirements at a time when the opportunities for investment were and the capital market was being eagerly canvassed by many, said Mr Watts. As with previous national development loans, the money raised would be spent on such essential works as housing, schools, electric power supply, railways, land development, and telephones, all of which were high on the top priority list of public expenditure, he said. Choice of Terms Investors are offered a choice of terms. The first, Which is for a period of three years, will appeal to investors who prefer short-term commitments. This will be issued at £99 10s (a discount of 10s per cent.) and will bear interest at the rate of 3? per cent. It will mature on August 15, 1958. The long-term alternative is for 11 years, maturing on August 15, 196566, and the interest rate is 4 per cent. The issue price is £99 (a discount of 20s per cent.). At its issue price, the short-term loan will return £3 18s lOd per cent., and the lon 0 -term loan at its issue price will return the investor £4 2s 4d per cent. > The provisions of the loan incorporate certain concessions that have made previous loans appeal to investors.

Both ordinary and death duty stock are available, and death duty stock may further be used for the payment of income tax and social security charges in the estate of a deceased holder.

A further concession is the rebate of income tax on interest f rom the loan to ensure a minimum net return of 2 per cent. “I appeal to the investing public to give generous support to this loan,” said Mr Watts.