Rates unchanged for Marac’s new issue

Press, Volume CXI, Issue 32635, 17 June 1971, Page 9

Rates unchanged for Marac’s new issue

In its latest issue of $2,000,000, Marac Finance, Ltd, has maintained the rates of interest on all terms of debenture and unsecured notes at the levels of the previous issue.

The rates had been held at the attractive levels offered in March, as these had proved fully competitive on the market, said the managing director (Mr J. D. Rose). The previous issue, of $1,500,000 and oversubscriptions of $3,000,000, had completely filled. The latest issue seeks

$2,000,000, with oversubscriptions of $4,000,000. It is Marac’s largest issue to date. Demand for the company’s facilities continues at a high level, and the new funds raised will be used in extending the financial assistance at present given to New Zealand industiy and commerce Mr Rose said. The interest rates on debenture range from 6 per cent for the six-month-tefm

to 8} per cent for the term from 10 to 15 years. The rates on deposits by way of unsecured notes are about i per cent higher, climbing from 5| per cent for money at call to 8) per cent foi deposits at five years. The debenture stock has priority over all other liabilities, and is secured by a floating charge over Marac’s assets, which exceed $18,000,000. The interests of debenture holders are governed by a trust deed of which National Mutual Life Nominees, Ltd, is the trustee. Unsecured notes The unsecured notes rank after the debenture and equally with all other unsecured creditors; New Zealand Insurance Company, Ltd, is the trustee for th* noteholders. The assets cover calculated by the auditors, on the assumption that $1 of notes is taken up for every $2 of debenture, is $216 for every $lOO of debenture. After the latest issue the assets would be sufficient—after deduction of secured liabilities—

to give a cover of no less than $l3O for each $lOO of unsecured liabilities, including unsecured notes. Receivables have almost doubled in the last two years; the expansion has been mainly in fields in which the banks have been traditionally active; such as bridging finance and seasonal finance.

In the five years since 1967 Marac’s profit has risen from $46,080 to $415,668; the dividend rate rose from 3) to 12 per cent, and dividends from $32,550 to $227,763. In the same period interest paid on borrowings increased from $137,256 to $776,967.