Dairy bonds warning

Press, 29 February 1984, Page 32

Dairy bonds warning

The Dairy Board has warned subscribers to its current bonds issue that interest rates may soon be lowered from the levels now quoted in its prospectus.

The prospectus for $5O million in bonus call, fixed term and bearer bonds was registered in December and the issue will close late in April. The rates advertised vary between 11.75 per cent, for a fixed three year term, to 10.5 per cent, for on-call investment.

The prospectus gave the board the right to adjust the rates at any time, but it considered it had a responsibility to warn investors at this point that a review was pending, the board’s public relations officer, Mr N. H. Martin, said yesterday.

“The issue is looking increasingly favourable in investors’ eyes,” he said. The amount raised in the issue so far was almost $4O million.

The issue is to provide funds for financing the board’s trading operation in the present year to May. It is the first time the board has had to raise money in this way. The Government has restricted the level of the board’s borrowing, at 1 per cent, from the Reserve Bank to $750 million, leaving the board to raise the remaining $4OO million needed this year from other sources. The bonds issue is unconnected to the board’s recent acquisition of a 10 per cent holding in Wattie Industries, Ltd, at an estimated cost of SSOM.