CITY LOANS

Evening Star, Issue 21622, 18 January 1934, Page 16

CITY LOANS

LOHCOII RENEWAL OPERATIONS fra MR G. A. LEWIN'S TRANSACTIONS It is now possible to give some more precise information with respect to the Dunedin City Council’s London loan renewal operations. The loans maturing totalled £356,900, but the actual loan sanction was for £356,000, the intention being that the odd £9OO should be paid off bv the council. ' “ Mr Lewin has not found it necessary to have the loan underwritten,” reported the Finance Committee to last night’s meeting. “In the first case existing (bondholders, were communicated with, and offered a renewal at 4i per cent, at par. for twenty years, the council to have the right to redeem the bonds or any portion of them at any time after fifteen years. In response _to that offer bonds to the value of £147.400 were renewed, equivalent to 4T.24 per cent. Subsequent to that operation Mr Lewin was successful in arranging direct for the sale of bonds up to £200,000 at 3 per cent, per annum, the issue price being £94 10s and the term five years. These terms are equivalent to a yearly cost to the. council of a little under 4J per cent.-, the actual figures being £4 4s 6d per cent. “ Apart from the above transactions, bonds to the value of £22,000 which were held in New Zealand, were duly paid in Dunedin on maturity on January 1. ‘ ■ “ These several transactions practi-' cally dispose of the whole of the loan’ operations, in particular as far as London is concerned, and the result must be regarded as eminently satisfactory. Apart from the low interest rpte (a shade under 4i per cent.), the operations, as conducted by Mr Lewin, "have been carried out at a remarkably low cost to the council—a. fraction over i per cent, in the case of the £147,400 renewals and i per cent, in the case of the £200,000 issue. v “ The committee has been kept fully advised by Mr Lewin, both by ca'ble and otherwise, as to the course of his negotiations, and the information to hand makes it abundantly clear that he has succeeded in, covering the loan requirements, under difficult conditions, on bed-rock terms and at comparatively small cost to the council. “ It will be necessary to obtain the authority of the Loans Board to a varia. tion in the terms of the original loan sanction to cover the variation in the interest rate and period of loan, and authority is asked to make the necessary application.” The following resolution was carried:—“That the council resolves that the necessary documents be executed in favour of the Bank of New Zealand by which the said council undertakes to duly complete all necessary legal requirements in respect of a loan of any sum up to £200,000 (being part of the said council’s renewal loan, 1934, of £356,000) in terms of a letter dated January 5, 1934, addressed by Messrs J. and A. Scrimgeour, London, to the town clerk, such loan to rank pari passu with 4J per cent. 15-20-year bonds both as to security and participation in accrued sinking fund.”