SEVEN MILLION LOAN.

Hawera Star, Volume XLV, 25 July 1925, Page 6

SEVEN MILLION LOAN.

AN OFFICIAL EXPLANATION. Dealing with the recently issued seven million loan the Minister for Finance in his budget statement last night said “The market conditions generally were not- as easy as twelve months previously, and it was decided to offer the issue at the same rate (4£ per cent.) as the last loan, but at £49 10s. —that is a discount of 10s. per cent, compared with the 1924 issue. These terms 'were accepted by the underwriters, . and the loan was issued to the public on the 11th May. The result was that investors relieved the underwriters .of approximately £1,000,000 only, leaving them with 8o per cent, of the total. “The settlement of finance and trade on account of the important change in respect to the gold standard adopted by the Imperial Government on the 28th April had, temporarily at all events, restricted, investment. Issues immediately following the New Zealand loan had similar experiences, such as the London County Council £6,000,000 at the same price, when the underwriters were left with 75 per cent. New South Wales issued a £6,500,000 loan at 5 per cent., price £9B 10s., the interest yield offered to investors being more attractive, equal to, £5 Is 6d, compared with our offer of £4 15s. 3d. It is clear that the reluctance of investors to relieve tb e underwriters betokened no lowering of tbe Dominion’s high credit, and it is of interest to note that the latest quotation for the loan is at a discount of ss. compared with a discount of £1 2s. 6d. after issue.”