Government Loan Of £4,500,000 Announced By Reserve Bank

Northern Advocate, 15 May 1939, Page 6

Government Loan Of £4,500,000 Announced By Reserve Bank

[Special to “Northern Advocate ”] AUCKLAND, This Day. \ GOVERNMENT LOAN OF £4,500,000, TO BE RAISED IN TWO ISSUES AT 4 PER CENT., BELOW PAR, WAS ANNOUNCED TODAY BY THE RESERVE BANK, ACTING ON BEHALF OF THE MINISTER OF FINANCE. THE TERMS OF THE ISSUES ARE: Four per cent stock at £96, repayable May 31, 1954-58. Four per cent stock at £99, repayable November 30, 1948. The yield to investors of the longer dated loan will be £4 7/5 per cent per annum, calculated on maturity at the earliest date, and £4 6/4 taking the ultimate date. The shorter loan will show a yield of £4 2/8 per cent. Thus the difference in favour of the longer loan approaches i per cent. Applications for the loan will cl ose on or before May 31, y

Important Provision.

An important provision regarding the 1954-58 issue is that if the market price of the loan falls below the issue price of £96, sums will be made available by the Government annually, as required, up to a total of 5 per cent of the amount of the loan outstanding at the end of the previous financial year for the purchase or cancellation .of stock on offer below £96. This provision will'have a stabilising effect on the price of the loan on the investment market. Stock of the 1948 loan, which has been held for at least six months by the purchaser will be accepted by the Government at par at any time before the date of materity in payment of death duties in respect of a deceased estate. The stock of both issues will be exempt from stamp duty on transfer otherwise than by way of gift. Purpose of the Loan. The proceeds of the loan are to be utilised by the Government for Public Works and general development pur-

chases in the Dominion, including capital expenditure on defence works. Among the' other provisions, it is stated that the stock issued will be an authorised trustee investment, and interest will be payable half-yearly on: May 31 and November 30. Under the terms of issue, 10 per cent of the price will be payable on application, 40 per cent on June 30, and the balance, being 46 per cent for the longer dated loan and 49 per cent for the other issue, on August 4. Government’s Second Loan. The present loan is the second issued in New Zealand 1 by the Labour Government. The first was for £ 13,930’,000, announced on October, 1936, by the Reserve Bank, investors haying a choice between 3£ per cent, stock repayable in 1953-57, and 3 per cent, stock repayable in 1939-41, The loan was chiefly for the conversion of 4 per cent, stock maturing in January, 1937, amounting to £12,400,000. Holders of the stock were given the option of converting their holdings to the new scrip. , Applications for conversion totalled £8,253,780, and the balance of the maturing stock was repaid in cash.

A cable from Brisbane says that four- aborigines are believed to have ‘been drowned when a launch capsized off Palm Island aboriginal settlement. A party of ten, comprising seven men and three boys, were aboard when the boat overturned in

a choppy sea. The survivors swam three miles to land.