RUSH FOR BONDS

Gisborne Times, 13 October 1932, Page 5

RUSH FOR BONDS

TREASURY 2 PER CENT. ISSUE

PROMPT SUCCESS OF CONVERSION 'SCHEME.

SHARP RISE IN BRITISH STOCKS/ ' ■ ’

(British Official Wireless.) RUGBY. - Oct. 11

The offer of £150,000,000 worth of 2 per cent. Treasury bonds, 1935-38. at par, met with prompt success today, and tire date for cash applications closed immediately. While cash applications were invited, however, the issue really represents a conver-

sion operation, preference being given to applications from holders of £150.000,000 worth of 4-J per cent Treasury bonds duo for repayment on December 1. Such holders, exercising tne right to exchange into new 2 per cent, bonds will, receive an equal amount of the latter, plus a cash payment of 10s per cent.

The announcement of the new conversion issue caused a sharp rise in British stocks, war loan assented opening at £lOl 17s Cd, and later rising to £lO2 ys 6d. The market interprets the new issue to mean that in the official view money is likely to remain cheap for some time to comeOn December 1 the Government hay to provide £165,000,000 f°r the repayment of the unconverted 5 per cent, war loan, £140,000,000 for the redemption of the \\ per cent. Treasury bonds, and £13,000,000 for the remaining balance of the A.\ per cent. It is assumed that the Government has plans other than the issue of short-term bonds in view for dealing with the balance of which remains of this total of £318,000,000. Success had been expected for the issue of £150,000,000 worth of Treasury bonds, but the dosing of the lists almost immediately after they had been opened this morning had a stimulating effect on British giltedged securities generally. There were sharp rise.-; among these although the fluctuation caused by the natural sequel of profit-taking occurred during a busy day. At the close there were gains in British funds ranging from 7s 6d to £1 lDfi with the war loan assented finishing well under the best at £lOl 17s 6d. All hough cash for the Treasury's new bonds reached a very big figure, despite the fact that the 2 per cent, rate is the lowest offered on a British Government security within the. memory of the City, the issue really represents a conversion operation. It is calculated that so far as 41 per cent. Treasury bonds are concerned, about £3,7.50.000 will be saved on the national debt. The recent conversion of the 5 pe r c-ent. war loan effected a saving of oyer £30.000,000. N.S.W. LOAN CONVERSION MORE THAN SATISFACTORY. DEALINGS OPEN AT PREMIUM. -U r a by Elec. TcJ. Copyright) ! Received Oct. 13. 12.55 a.m.) LONDON, Oct. 12. Nie.w South Wales loan holders •favoring conversion received their allotments in full. Cash subscribers received lit per cent, of the amounts applied for. In all 63 per cent, of the holders converted. Cash applications reached over £39,000,000. Australian financial circles regard the conversion as more than satisfactory, seeing that a higher percentage converted than is usual in the ease of Dominion loans, although it is suggested in some quarters that the conversion would have been larger if tlie issue had been kept open longer than a week. The authorities emphasise that it would have been contrary to London custom to exceed a week. Dealings in the new loan have opened at £2 5s to £2 10s per cent, premium.