NEW ZEALAND LOAN.

Hawera Star, Volume XLVII, 4 May 1928, Page 5

NEW ZEALAND LOAN.

WHAT IT IS REQUIRED FORFINANCE MINISTER EXPLAINS. .11 Ic.L.&UK.At'U CKUHS ASSOCIATION i WELLINGTON, May 3. The Hon. \Y. Dowme Stewart, Minister of Finance, stated to-day that the loan just floated in London to provide the additional capital required for carrying on the -public works programme is for an amount of £5,000,UOO, bearing interest at 4£ per cent, with the issue price of £94 10s per cent. Including the redemption of discount over tne period of the loan this will give a return to investors of about £4 19s 8d per cent as compared with. £5 Os lOd from last year’s loan, which was 5 per cent at £99 10s. This issue at 41 per cent is a definite break from the 5 per cent rate which has obtained in London for some time, and indicates a distinct tendency towards easier conditions. Combined with the issue for new money there is an oHer to holders of our 4 per cent consolidated stock, £29,000,000 of which matures in November 1929, to convert their holdings, up to a limit of £5,000,000 in the aggregate, into 4} per cent stock at the rate of £lO4l of new stock for every £IOO of the old. This is equivalent to the issue price of about £95 14s for new stock, giving a- return to investors, with redemption of discount over the perido, of £4 16s 10cl per cent. The terms are regarded as satisfactory in view of the ruling rates of interest, especially when it is l>orne in mind that the market- will have to hear such I heavy calls in dealing with our 4 per cent maturing stock. The policy of offering portions of the- £29,000,000 before maturity, while costing some additional interest for 12 months, should have the result of placing the whole stock on a more favourable basis than if left to be attempted in one sum at the date of maturity. “T have just been advised.” added, the Minister, “that the £5,000,000 loan which was issued in London yesterday was over-subscribed and the lists closed at 11 o’clock. The success of this 4.’- per cent issue will not only benefit <i<- directly, but_ gives good colour to the authoritative statements recently made that- British- finance and- trade are moving towards improved conditions.”