LOANS CONVERSION

Northern Advocate, 21 July 1933, Page 5

LOANS CONVERSION

NEW BRITISH OFFER MONEY DUE TO AMERICA. LOWER INTEREST PAYMENTS. (United Press Association—By Electric Telegraph.—Copyright.) (Received 9 a.in.) LONDON, July 20. The Treasury announces a new conversion offer, dealing with the loan of £5,000,000 dollars raised by Britain in the United States in January, 1917, for the purchase of munitions. The issue, after a certain amount of conversion, ultimately took the form of 20-year, 5i per cent, gold bonds, redeemable at par on February 1, 1937.

These bonds were in dollar denominations. The Government now offers to exchange them on the basis that the holder shall receive £260 in new bonds for every 1000 dollars of the 51 per cent gold bonds. The sterling bonds will be repayable in London on February 1, 1937, and bear interest at a rate of 21 per cent per annum, payable half-yearly. The first payment is to be made on February 1, 1934. Income tax is to be deductable at the source. The Treasury states that the effect of the offer will be to increase the total amount of the. principal, and to diminish the interest payments during the period remaining before maturity. The offer is the result of the recent gold legislation. The amount of 20-year bonds outstanding is 136,333,500 dollars, or £28,013,733 at par. The interest on this is equivalent to £1,540,755 a year, Whereas the interest on the sterling bonds will be £886,168 a vear, ■. • i