N.Z. TO CONVERT £7 MILLION LOAN IN LONDON

Grey River Argus, 17 February 1949, Page 7

N.Z. TO CONVERT £7 MILLION LOAN IN LONDON

LONDON, Feb 15. The city editor of the '‘Evening Standard” says:— “The New Zealand Government plans a big new conversion offer on the London market in the near future. The offer will concern £7,322,579 of 3J per cent, inscribed stock, 1949-54, which is redeemable at any time on three months’ notice. “The New Zealand Government may pay off the odd amount of stock out of its London sterling balances, leaving a round figure of £7,000,009 to be dealt with by a cash and conversion offer. The new loan, which is likely to be 3 per cent, stock at about par, will be underwritten in the normal manner. Full details of the loan are likely to be posted to holders of 31 per cent, stock within the next two days. The present stock' was dealt in on the Stock Exchange at about £101.” New Zealand House has refused to comment.

Financial circles confirm that arrangements are being made to float a New Zealand conversion loan on the London market in the near future. There is considerable speculation on whether New Zealand will arrange for the underwriting of the loan on the commercial market, or entrust the underwriting to the New Zealand Reserve Bank, as was done with the £16,000,000 conversion loan floated in London in June last year. The Times says: “The terms of anv new issue must be expected to be dearer than in 1948. but the question is, how much dearer? The market is now looking for new stock to run 22 to 25 years. An impression holds that a recent stiffening of gilt-edged issue terms is part of the familiar process of ‘conditioning’ investors for a home Government refunding programme later in 1949 in connection with £700,000,000 of national war bonds 1949-51 and £786,000,000 of Exchequer bonds, 1950.”