London Loan Repayment

Press, Volume CIV, Issue 30857, 16 September 1965, Page 1

London Loan Repayment

(New Zealand Press Association)

WELLINGTON, Sept. 15. Financial arrangements of the £l7 million loan repayment which was made in London were announced today by the Minister of Finance (Mr Lake).

He said that of the total amount of £17.047 million to be redeemed at September 1, only £14.111 million was held by the British public and by London financial organisations.

Mr Lake said the balance of £2.936 million was held by New Zealand Government departments (Post Office £2.260 million, Government Life Insurance £.626 million, and Reserve Fund £.050 million), with special arrangements for the interest to be credited in New Zealand. In these circumstances the net cash required to be provided in London to meet the maturity was only £14.111 million, the Minister said. A £lO million loan was recently floated on the London! market for the specific pur-' pose of providing the major! portion of the funds needed I for this redemption. As only £1 million of the proceeds of this loan had been received by September 1. it was necessary to provide temporary finance by realising short-dated Treasury investments held in London, but these would be built ip again as the instalments of the £lO million loan were received. “There will, however, be a decline of about £4 million in these Treasury investments when the transactions are completed, representing the difference between the net cash of £l4 million already mentioned and the proceeds! from the new London loan of £lO million.” said Mr Lake j “As the Post Office and I Government Life investments are both outside the Public! Account the £2.9 million has accordingly never been in-

cluded in the published figures for public account overseas investments held by the Treasury,” the Minister said “Neither of these organisations now really needs to hold London investments, and in the circumstances the £2.9 million is being replaced by suitable Government stock issued in New Zealand,” he said.