LOAN CONVERSION.

Manawatu Standard, Volume LV, Issue 197, 19 July 1935, Page 6

LOAN CONVERSION.

MINISTERIAL STATEMENT. Per Press Association. WELLINGTON, July 18. The acting-Minister of Finance (Hon. A. Hamilton) stated to-day that lie had noticed a Press report of a statement emanating from Mr T. H. McCombs, the Labour candidate for the Lyttelton by-election, regarding the recent loan conversion operations in London. Mr Hamilton remarked that Mr McCombs was very much at sea as to the true position. In the case of the Now Zealand conversion a cash issue was made at 3 per cent, at £9B 10s, which gave a return to the investor of £3 2s per cent, over the full currency of the new loan (20 years), whereas the India loan to which reference was made was issued at £9B with interest at 3 per cent, returning to the investor £3 3s per cent, over the full period of 17 years as compared with £3 2s 3d in New Zealand’s case for tlie corresponding term. “It will thus he seen,” said the Minister, “that the New Zealand loan was a sligthly more favourable transaction than that of India.”

In regard to the suggestion that the New Zealand Government threw away £140,000 on the transaction, Mr Hamilton went on to say that he was unable to understand this statement as it would be impossible by any practical method to have done what Mr McCombs suggests. Tlie New Zealand loan had certainly advanced \ per cent, on London market quotations , but the cabled reference to the quotations being made at { per cent, premium did not mean that stock was settling at £IOO 5s hut that it had advanced i per cent, on the original issue price, that is from £9B 10s to £9B 15s, such advance clearly indicating the popularity which New Zealand issues enjoy on the London market. This popularity lial enabled the Government to effect the conversion on terms actually more favourable than those of the recent India loan.