RATE OF INTEREST HIGHER
(By Telegraph.—Press Assn.—Copyright.) CANBERRA, November 19. The Federal Treasurer announces that a Commonwealth loan of £7,500,000 will open for public subscription on November 26. Interest will be at ii per cent. The loan will be issued at £99 15s and will be repayable in 1949. At the close of the Loan Council's sitting on November 8, the following official statement was issued:— Before considering the question of a loan on the market, the Loan Council examined the financial position of the Government in the light of Budgets that had been introduced since the Council met in May last. The tentative deficits for the current year were then estimated at £4,450,000 for five States (excluding Tasmania). The Budgets of these States showed savings of £1,050,000. The Tasmanian deficit is now estimated at £320,000, and revised estimate of deficits for all States is £3,720,000. Towards the programme approved for the year there was available at the beginning of the year £13,500,000 of cash balances held by the several Governments. Domestic raisings from semiGovernmental institutions were estimated to bring the available funds up to £15,200,000. Arrangements have now been made with the Commonwealth Bank to underwrite a loan of £7,500,000, the terms being 32 per cent., issue price £99 15s, and the period fourteen years —the actual yield to investors being £3 15s 5d per £100. The rate of interest offered for this new loan of 3J per cent, compares with 3 3-8 per cent, for the £ 12,500,000 Commonwealth Loan issued at £99 10s offered in June last, and of which £10,800,000 was subscribed by the public, the balance being taken up by the underwriters. The reason generally assigned for the present offering of but £7,500,000 and that at a higher rate of interest, is to ensure its being all taken up by the public. The higher rate of interest, 3? per cent., too, may be taken as an indication of the hardening of the Australian money market.
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Bibliographic details
Evening Post, Volume CXX, Issue 123, 20 November 1935, Page 14
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329RATE OF INTEREST HIGHER Evening Post, Volume CXX, Issue 123, 20 November 1935, Page 14
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