A.G.C. cuts interest on debentures
Zealand Pr«.sf Association —Copyright> SYDNEY. Australian Guarantee Corporation, Ltd, has announced it will cut rates for debentures by up to 1 per cent in its next prospectus, continuing the trend towards lower interest rates in Australia.
The announcement by AG.C.. Australia’s largest financier, came after Industrial Acceptance Corporation, Ltd, reported it was reducing rates across-the-board for its current debenture issue, having raised more than sAust3om in eight weeks. General Credits Holdings, Ltd. also cut its rates in its latest prospectus, in response to a high level of liquidity.
Last week, A.G.C. lowered the interest rate on its unsecured notes at call after three months from 9 per cent to 8.5 per cent. The A.G.C. will offer a top rate of 11.5 per cent for debentures in the new prospectus, to be issued next week. This is the first time this rate has dropped below 12 per cent since A.G.C. initiated the rate in June, 1974.
The group is seeking basic subscriptions of Slsom (SlOOm previously) and will accept another Ssom in oversubscriptions. However, the company has
:not abandoned the 12 per cent rate. It will pay this injterest on unsecured notes i with a two-year term. The full range of interest rates offered for debentures are:— three and four years, 11.5 per cent (12 per cent previously); two years, 11 per cent (11.5 per cent); one year, 10 per cent (11 per cent).
The company expects a continuing high level of liquidity, and a low level of demand for short-term money.
Other finance companies are likely to follow suit over the next few' weeks until seasonal pressures on liquidity start to build up. Money market observers feel that although short-term rates will tend to ease during the three months to March 31, there will be a firming tendency in the second and third quar--1 ters.
Official rates are expected |to hold around current levels, because the Government itiself is expected to continue as a substantial borrower.
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Bibliographic details
Press, Volume CXVI, Issue 34046, 9 January 1976, Page 11
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331A.G.C. cuts interest on debentures Press, Volume CXVI, Issue 34046, 9 January 1976, Page 11
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