LOANS IN NEW YORK

Hawera Star, Volume XLVI, 11 July 1927, Page 5

LOANS IN NEW YORK

REGENT AUSTRALIAN ISSUES. DISCUSSED BY BANKERS. ny CABLE—PRESS ASSOCIATION—COPY RIGHT NEW YORK, July 10. Mr. McCormack, Queensland Premier and Treasurer, interviewed, said lie had been in touch with various leading bankers. He had discussed the financial situation, but no .new Queensland Joan was odntemiplated at present. He felt it inevitable, however, that more Australian financing would be placed in future with the New Y ork market, which offered possibilities, provided adequate arrangements were made to “look after” such loans when floated. Referring to the reports of the Commonwealth flotation el a £i, 000.0110 loan in London, .gome /bankers claim that this could be floated on better terms in New York. Keen observers, however, point out that only 100,000,000 dollars in new bonds have been floated here in the past fortnight, compared with 200,000,000 and 300,000.000 in single weeks earlier in the year. These observers stress the fact that there is a tendency with many underwriting houses to allow the present supplies of bonds to he fully distributed •among the ultimate purchasers before bringing opt additional large issues. There is also some comment on the fact that the last New South Wales bonds were recently sold in the open market at three points below the price at which they were underwritten. One interpretation is that, the low price indicates that a considerable portion of these bonds were left in the underwriters’ hands, although phis in no way reflects on the excellence oi these bonds.

Still another interesting interpretation (is that no loan can be considered finished business, even after 'being successfully underwritten. It i,v stressed that any fall in the price can quickly be corrected by having a borrower buy on the open market offerings of bonds concerned. This is termed “looking after the issue after flotation,” and is but one of the necessary manipulations in adequate financing operations. . One other important observation is being made in Wall Street, namely, that it is difficult to indicate at any given time just what nett return any given Australian loan would bring here. It is .said that would depend wholly upon the condition of the market which just now is a little slow.