WORKS LOAN ANNOUNCED

Press, Volume XCVIII, Issue 28890, 9 May 1959, Page 14

WORKS LOAN ANNOUNCED

Government To Seek £lsm

(New Zealand Press Association) WELLINGTON, May 8.

The Minister of Finance (Mr Nordmeyer) today announced that the Government will seek a works loan of £l5 million. The loan will open on May 14 and close on June 12.

Mr Nordmeyer said the loan was to finance public works and to maintain the Government’s programme of capital development by providing power, transport and communications facili-’ ties to keep pace with population growth.

Investors will have three choices of stock. Long term stock maturing October 15, 1971-73 and medium term stock maturing October 15, 1965, will bear interest at 43 per cent. There will also be short term investment stock bearing interest at 4J per cent, maturing October 15, 1962.

All issues will be at par. The interest rates are the same as those offered during the last two years. Both ordinary and death duty stock will be available. Mr Nordmeyer said that the fact that death duty stock would be accepted at full face value for the payment of income tax or death duty due on the estate of the holder, had proved an attractive feature in previous loans. An offer of similar stock is being made to stock holders in the loan maturing on June 15 and the Reserve Bank is posting application forms to holders. The conversion offer willbe open from May 11 to May 29.

“Demands for capital funds by local bodies for essential services and by the private sector for housing development and other needs are very heavy, and the Government must have regard to the requirements of these other sectors of the economy,” Mr Nordmeyer said.

“The amount sought—£ls million—is my assessment of the amount that should be available from investors for a Government loan at this time. The more money that is subscribed to the loan, the less is the need to provide revenue to meet the works programme we must face unless development is to fall behind. “I would like to see the loan oyer-subscribed as this would facilitate the framing of financial policy for the current year,” Mr Nordmeyqr added.