BRITAIN’S TREASURY ISSUE

Hawera Star, Volume LII, 13 October 1932, Page 5

BRITAIN’S TREASURY ISSUE

SUCCESS OF NEW ISSUE

CONVERSION OPERATION

‘British Official Wireless.)

RUGBY, Oct. 11. The offer of £150,000,01)0 of 2 per cent. Treasury bonds maturing lJoo-oo at par met -with prompt success to-day, the list being open for only an hour. While cash applications are invited, however, the issue., really represents a conversion operation, preference being given applications from holders of the Ul 40,000,000 4’ per cent. Treasury bonds due for repayment on December 1. Such holders exercising the right to exchange into the new 2 per cent, bonds will receive- an equal amount of the latter plus a cash payment of 10s per cent. The announcement of the new conversion Issue caused a sharp rise m British war loan, assented stock opening at £lOl 17s Gel and later rising to £lO2 7s Gd. The market interprets the rise of the new issue to mean that m the official view money is likely to remain cheap for some time to come. On December 1 the Government lias to provide £165,000,000 for the repayment of the unconverted o per cent, war loan, £I4O,(XX),O(X) for the redemption of 4.l per cent. Treasury bonds, and £13,000,000 for the remaining balance of the 4J per cents. It is assumed the Government has plans other than the issue of short-' term bonds in view for dealing with the balance of approximately £168,000,000, which thus remains. Of this total of £318,000,(XX) success was expected for the issue of £150,000,000 2 per cent. Treasurv bonds, but the closing of thej lists almost immediately after thev had been opened this morning had a stimulating effect on British gilt-edged securities. Generally'there were sharp rises among these, although fluctuations caused b v the natural sequel of profittaking oceuried during a busy day. At the close gains in British funds were general, ranging from 7s Gd to £1 15s, with assented war loan finishing well under the best at £lOl 17s Gd. Although cash applications for the Treasury’s new bonds reached a very big figure, despite the fact that the 2 par cent, rate is the lowest offered m the British Government security within the memory of the City, the issue really represents a conversion operation. Calculated so far as the 4J- per cent. Treasury bonds are concerned, about £3,750,000 will lx- saved on the service of the national debt. The recent conversion of the 5 per cent, war loan effected a saving of over £30,000,000.