Many debenture issues now on market

Press, Volume CXIV, Issue 33654, 2 October 1974, Page 20

Many debenture issues now on market

The scramble by New Zealand’s finance houses for a share of public investment moneys is intensifying, and three of the major "roups have joined the ranks of debenture issues. ”

I Among these, U.D.C. is a j newcomer to the debenture (field. A number of financiers who had previously relied on unsecured deposits were forced ’ to go over to issuing deben- ' tore stock after the changes in the Interest on Deposit Regulations from May 31. B.N.Z. Finance and Lom'ibard were among others affected by the change. U.D.C. U.D.C. Group Holdings/ Ltd, is making an issue of! registered secured debenture: j stock. This is somewhat ofi ja milestone in the history of the group, as in the past the: group raised most of its 'finance by way of unsecured deposits. i Current unsecured depositors of U.D.C. Finance, Ltd, ithe main operating company,?' are being offered the oppor-l Itunity of converting existing' deposits to the new secured ' issue. U.D.C. is seeking an un-p specified amount, at least un-i< til it is known how many ofi< the unsecured depositors willji take up their rights. J a The latest balance-sheet! for the group showed borrowings from the publics of more than s24m — ofi which more than S22m wasuj by way of unsecured deposits.; a Terms and interest rates'll are: six months 5| per centre one year 6 per ’cent; two f year 6? per cent; three years'? 7 per cent; four years 7| per cent; five years 10 per cent. The amount of the stock which may be issued is limited by the secured trust deed to an amount — includ- r ing prior mortgages — equal r to six times the shareholders’! n funds of the charging group, 'R or 80 per cent of its total y tangible assets, whichever is ! the lesser. i c

i The Trustees Executors and : Agency Company of New Zealand, Ltd, has been appointed the trustee for the ■ debenture holders. I Broadlands Broadlands Dominion Group has opened its twenty-first debenture issue i — a slsm offering which, it says, was brought to market jwo months earlier than planned because of the success of its last slsm issue jin June. The interest rates are the same as those for the June i issue, except in the case of long-term stock. For investments of seven ! iyears and over, the interest rate is a matter of negotiation between Broadlands and fthe investor. In the June' [issue, the company offered per cent seven-year to! inine-year terms and 91 per ’cent for 10 years and’ upwards. , Negotiation is becoming a i new term for longer finance company stock. It indicates an unwillingness to advertise publicly just how high i they are prepared to go to 1 attract this sort of money. i Broadlands is also offering a new scheme — its retirement annuity plan. The company gives the - example of a person, at the' aged of 60, investing $10,000! under this scheme and re-! ceiving, from age 65 to 80, a i guaranteed annual income of $1776. Marac Showing increasing awareness of the public’s require- i ments, Marac Finance, Ltd, a major subsidiary of the Marac Holdings group, - yesterday released a "new look’’ prospectus. This covers the nineteenth issue

for secured debenture stock and unsecured notes. Marac seeks s6m with a right to accept over-subscriptions up ,to a sum not exceeding a (further sBm. Commenting on the pre- • vailing investment climate, Mr J. D. Rose, Marac’s managing director, said he was very pleased with the support gained from the public with Marac’s last issue : which raised more than s7m. ; This represented an oversubscription in excess of slm, he said. “So that our investment plans appeal to as many people as possible, we have simplified much of our prospectus,” said Mr Rose. “As a result, the booklet gives a clear idea of how finance companies work, how in-: vestors’ money is used, what security is offered to protect money invested at higher-than-average interest rates, and so on. Also, we will ! now accept minimum in- i vestment amounts of $5O, ! not $lOO as in the past”. Two interesting features j of the Marac prospectus are the higher asset-backing for debentures, and the introduction of a 20-year term n all categories.