THE 1925 LOAN

Evening Star, Issue 19002, 25 July 1925, Page 3

THE 1925 LOAN

ITS ALLOCATION Mr Nosworthy makes some reference (as under) to the 1925 loan:— In April last inquiries were instituted as to the raising of a loan on the London market for Public Works and State Advances purposes, the commitments of

the latter office requiring early attention. The total amount was fixed at £7,000,000, the allocaton of which is: Public works (including railway construction and additions and telegraph extension), £3,500,000. Electric supply, £500,000. Pailway improvement authorisation, £500,000: Main Highways, £500,000. State advances—Settlers, £1,000,000; workers, £1,000,000. The market conditions generally wore not as easy as twelve months previously, and it was decided to offer the issue at the same rate (4£ per cent.) as the last loan, but at £94 10s—that is, a discount of 10s per cent, compared with the 1924 issue. These terms were accepted by the underwriters, and the loan was issued to the public on May 11. The result was that investors relieved the underwriters of_ approximately £1,000,000 only, leaving them with 85 per cent, of the total. The un&ettlomcut of finance and trade on account of, the important change in respect to the gold standard adopted by the Imperial Government on April 28 had, temporarily at all events, restricted investment. Issues immediately following the New Zealand loan had similar experiences, such as the London County Council £0,000,000' at the same price, when the underwriters were left with 75 per cent. New South Wales issued a £0,500,000 loan at 5 per cent., price £9B 10s, the interest yield offered to investors being more attractive, equal to £5 Is fid, compared with our offer of £4 15s 3d. It is clear that the reluctance of investors to relieve the underwriters betokened no lowering of the dominion’s high credit, and it is of interest to note that the latest quotation for the loan is at a discount of 5s compared wth a discount of, £1 2s Cd after issue.