Compulsory Loan Interest

Northern Advocate, 1 October 1943, Page 5

Compulsory Loan Interest

Interest on the compulsory war loan of £8,000,000 issued by the Government in October, 1940, will accrue from today, the rate being 21 2 per cent. When the. loan was placed on the market opposition was expressed in some quarters at the action of the Minister for Finance (Hon. W. Nash) in introducing the compulsory feature. The extent of subscription was based upon the income tax paid in the previous year.. The loan was interest free until October 1, 1943. When made available for dealings on the Stock Exchange quotations gave a valuation of £7B/10/-. During the past 12 months, with the interest-bearing date coming nearer, the value of the stock has steadily risen and yesterday buyers were offering £93/12/6, with, sellers asking £94. This brings the issue from an investment point of view into line with other 2V2 per cent, loans. On the basis of the vendors’ price of £94 the yield based upon redemption at maturity is approximately £3/4/3 per cent, per annum. Although interest accrues from today, the initial payment, namely, for a half-year, is not due until April 1, 1944.