AUSTRALIAN LOANS.

Hawke's Bay Tribune, Volume XVII, Issue 177, 12 July 1927, Page 7

AUSTRALIAN LOANS.

PROSPECTS OFFERED BY NEW YORK.

VIEWS OF AMERICAN FINANCIERS. New York, July 8. Mr. McCormack, Queensland Premier and Treasurer, interviewed, said he had been in touch with various leading bankers and discussed the financial situation, but no new Queensland loan is contemplated at present. He felt it inevitable, however, that more Australian financing would be placed in future with the New York anarket, which offered possibilities, provided adequate arrangements were made to look after such loans when floated.

Referring to reports of a Commonwealth flotation of £7,000,000 in London, some 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 present supplies of bonds to be fully distributed among ultimate purchasers before bringing out additional large issues. There is also some comment on the fact that the last New South Wales bonds recently sold in the open market at three points below the price at which they wore underwritten.

One interpretation is that the low price indicates that a considerable portion of these bonds were left in the underwriters’ hands, although this in n<> way reflects on the excellence of these bonds. Still another interesting interpretation is that no loan can be considered finished business ever after being successfully underwritten. It is stressed that any fall in price can quickly be corrected bv having the borrower buy on the open market offerings of the bonds concerned. This is termed “looking after the issue after flotation.” and is hut one of the neces-

sary manifestations in adequate financing operations. One other hniw»rtanl observation is being l in ado in Wall Slropf namely, that, it is difficult to indicate at nnv given time iust wlrnt not return nnv <riveu \ustr.alian loan would bring boro. Tt is said t'liai would donend wholly upon flip eoiitlil bm of fhe market, which ■ ’•si now is :i lit! Io slow. (A. and N-.Z.)