THE LOAN CONVERSION

Grey River Argus, 16 October 1936, Page 7

THE LOAN CONVERSION

LOWER INTEREST Minister’s Announcement (Per Press Association). WELLINGTON, October 15. Hon. W. Nash’s statement regarding the redemption of £12,400,000 worth of 4 per cent. Government stock, on January 15th, says that holders of 1937-4(1 securities are invited to convert fbeir holdings either into 34 per cent, securities, maturing- in 1957. with an option to the Government to repay two years earlier on giving three months’ notice or into 3 per cent. Stock, maturing 1942. Under this arrangement holders of 1937-40 stock and debentures, will have the option of accepting repayment of their securities in whole or in part on January 15th next, or of exchanging their present holdings for new securities, with a choice between a 20-year security bearing interest at 34 per cent, and a short-term security of 4-J years, bearing interest at 3 per cent. To provide funds to repay holders of tho 4 per cent. 1937-40 securities who do not elect to convert, and also for retiring short-dated securities issued for the purchase by the State of the under, taking of the Southland Electric power Board, investors in general are invited to subscribe for either short-dated or long-dated new securities. The amount of the Southland Power Board loan is £1.580,000.

“I am convinced” the Minister’s statement, continued, “that the continued prosperity of the Dominion is bound' up to a considerable degree with the maintenance of interest rates at a low level, and the success of this issue will have desirable reactions in that direction. Government securities provide the safest and most readily marketable form of investment . possible, and the rates of interest paid on these securities are the standard on which interest rates on other classes of securities are based. Experience has shown that when rates of interest rise to high levels, depression invariably follows, as the whole field of industrial activity is affected. For this reason I appeal to the people generally to support the Government in its efforts to stabilise industrial actiivitj', and generally serve and promote the economic welfare of the Dominion.” The statement concludes by pointing out that this will be the first new issue of Government, securities to the public since the issue of 1933, and the Minister expressed his confidence that it will be given wholehearted support by present holders of securities and by investors generally.