N.Z CONVERTING £6 MILLIONS OF LONDON LOAN

Grey River Argus, 6 October 1949, Page 5

N.Z CONVERTING £6 MILLIONS OF LONDON LOAN

WELLINGTON. October 5

“A cash and conversion offer is being issued to-day for £6,000,000 of the New Zealand Government loan of £7,500,000, bearing interest at 5 per cent., which will mature in London on December 15 next”, announced the Minister of Finance, Mr Nash, to-day. The remaining £1,500.000 of the maturing loan will be repaid from funds to be remitted from New Zealand.

“The new £6,000,000 loan will bear interest at 31 per cent., and mature on December 15, 1966, with the option to the Government to repay on or after December 15, 1963, on giving three months’ notice”, continued Mr Nash. “Holders of stock in the maturing loan are being offered £lOO of the new stock for £lOO of the maturing stock, plus a cash payment of 365. “To provide further funds for the repayment of stockholders who do not elect to accept the conversion offer, cash applications are being invited at the issue price of £9B 10s for £lOO of stock. The 30s premium per cent, to. those accepting conversion and the issue price of £9B 10s for cash applications mean that the effective rate of interest on the new loan is £3 7s 4d per cent. “These terms are in line with the existing market rates, which have recently shown a rising tendency. Conversion of the loan will mean an interest saving of £1 12s 8d per cent, on the rate paid on the maturing loan”.

The Minister added that the redemption of £1,500,000 and of the maturing loan would further reduce the amount of New Zealand Government securities domiciled in London. .No new loans had been raised in London for many years, but since March 31, 1945, in addition to paying off the then outstanding war debt, repayments of debt had amounted to £38,000,000.