CONVERSION LOAN

Evening Post, Volume CXVI, Issue 26, 31 July 1933, Page 10

CONVERSION LOAN

AUSTRALIA'S LATEST

TERMS REVIEWED

<From "The Post's" Representative.) SYDNEY,' July. 20.. The announcement of .the . terms of Australia's latest conversion loan of £17,000,000 lias given great satisfaction within the Commonwealth, and to the people as a. whole is a further sign of a return to normal times. The yield, including ; redemption at the end of fifteen years, is £4 Is lOd per cent., and in view of the length of the currency of the loan this is not regarded as extravagant, especially when due consideration is given to the disturbed financial ' position of the world today. The loans concerned in the latest conversion and the annual interest saving in sterling are: — Amount. Saving. £ £ New South Wales .. 0,527,000 182,000 Queensland 2,000,000 38,000 South Australia .... 2,978,000 i 57,000 Western Australia .. 2,716,000 52,000 Total £17,221,000 £329,000 It is pointed out that the loan represents a further step in the conversion of high interest-bearing loans with optional dates of maturity in London. When conversion has been effected, all Australian Government loans in London carrying a rate of 6 per cent, or higher will disappear, with the exception of a Commonwealth issue of £15,000,000. It is recalled that the last conversion loan of £11,410,000 arranged in London late in May was heavily over-subscribed. The loan was for a five-year term, bore 3'A per cent, interest, and-was issued at £99. Based on a period of five years, the yield obtainable was £3 14s 3d. The Commonwealth is standing aside for the present, giving the States the full benefit of the Budget relief. involved. The Commonwealth will await another opportunity—which should come soon —to convert its £ 15,000,000 of 6 percent, securities. This fact emphasises the importance to the States of Mr. Bruce's conversion mission in London. Although progress towards reducing overseas interest has been slow, it has been sure. The Commonwealth policy is to convert gradually the whole of the optional -stock bearing interest above 4 per cent., and it is hoped that by the end of the year little of the original £84,000,000. of high interest-bear-ing optionals will remain for conversion. Of the total of £517,000,000 owed in London, Australia had optional rights to repay approximately £129,000,000, of •which £15,000,000 was Commonwealth stock. About £45,000,000 bears .interest of from 3 to 4 per cent., and of, the balance about £43,000,000 has already been converted. ' . •