£5,000,000 LOAN

Evening Star, Issue 19857, 4 May 1928, Page 10

£5,000,000 LOAN

OVERSUBSCRIPTION AHNDUNCED DEFINITE BREAK FROM 5% RATE CONVERSION OP MATURING LOAN ALSO OFPERED. (Pbb United Press Assocutiov.] WELLINGTON, May 3. The Hon. Dow me Stewart, Minister of Finance, stated to-day that the Londou loan to provide additional capital required for carrying on the Public Works programme is for the amount oi £5,000,000, bearing interest at 4' per cent., with an issue price of £94 lO per cent, “Including redemption'of discount over the period of the loan,” said the Minister, “this will give a return to the investors of about £4 19s 8d per cent., as compared with £5 Os lOd from last year’s loan, which was 6 per cent at £99 10s. “This issue at 4£ per cent, is a riefinte break from the 5 per cent, rate which has obtained in London for some time, and indicates a distinct tendency towards easier conditions. “Combined with this issue for new money there is an offer to holders «>f our 4 per cent. Consolidated Stock, £29,000,000 of which matures in November, 1929, to convert their holdings up to a limit of £5,000,000 in the aggregate into 4} per ceni. stock at the rate of £lO4 10s of new stock tor £IOO of old. This i.s equivalent to an issue price of about £95 14s for the new_ stock, giving a return to investors (with the redemption of discount over the period) of £4 16s 10cl per cent. “The terms are regarded as satisfactory in view of the ruling rates of interest, especially when ir. is borne in mind that the market will have to bear such heavy calls in dealing with our 4 per cent, maturing stock. The policy of offering a portion of the £29,000,000 before maturity, while costing some additional interest for twelve mouths, should have the result of placing the whole stock on a more favourable basis than if left to be attempted in one sum at the maturity date. “ I have just been advised that the '£5,000,000 casli loan which was issued in London yesterday was over-sub-scribed, and the lists closed at 11 o’clock. The success of this 4} per cent, issue will not only benefit ns directly, but gives good colour to the authoritative statements recently made that British finance and trade are moving towards improved conditions.”