NEW ZEALAND LOAN

Nelson Evening Mail, Volume LXIII, 10 January 1929, Page 5

NEW ZEALAND LOAN

WELL RECEIVED FURTHER PARTICULARS United Press Association—By Eleotrlo Telegraph—Copyright (Australian Press Association) LONDON, Bth January. The final instalment of the New Zealand loan, 35 per cent., is payable on 2nd May. Allowing for redemption in 1958, the yield will be £4 16s 5d per j cent. Holders of the 4 per cents maturing on Ist November, 1929, are invited to convert at the rate of £lO4 5s into the new 4g per cent, stock for every hundred of 4 per cents surrendered. The conversion offer is limited to £12,000,000. Holders on converting will receive on Ist March next four months’ interest, and a full half-year’s interest on the 4g per cents will be paid on Ist September, 1929. Cash applications will close on 11th January, and conversions on 26th January. LONDON, 9th January. Newspapers comment favourably on the New Zealand loan. .The “Daily Telegraph” says the Dominion always managed its finances well. The price is indicative of the high credit which welcomes expenditures there. The “Morning Post” says the issue was thoroughly well received on the market.

The “Financial News” says the appearance of a large issue with full trustee security is by no means surprising, and should go far to dispose of the November problem.

CONFIDENCE OF INVESTORS

United Servioe LONDON, 9th January. The News” commends the candour of New Zealand’s full statement of the position of the public debt and sinking fund legislation included in the new loan prospectus. “The statement shows that the confidence which investors in England all along h;)d in New Zealand’s credit, has been well placed. New Zealand’s good repute as a borrower is proved by the fact that investors holding public debt have risen from 16.86 per cent., in 1924 to 42.75 per cent, last March.”

AUCKLAND PAPER’S COMMENT

(By Telegraph—Special to "The Mail”)

AUCKLAND, 9th January. In the course of an editorial on the New Zealand loan, the “New Zealand Herald” says: “The announcement from London of preparations' for the issue of tile New Zealand loan of £19,000,000 cash and conversion is an intimation that the Government' is proceeding with its policy of borrowing £70,000,000, the central feature, of its election proguamme, and that it has also, to meet responsibilities independent of recent political controversies and the renewal of debt incurred by a previous generation. The latter will constitute the major portion of the flotation, which is in consonance with its .importance, since the debt maturing in November is nearly £24,500,000, a much larger sum than the annual amount of the new borrowing contemplated even in the United Party’s programme. The Government will, no doubt, be gratified by the initial success of its financial programme. The previous Government pledged itself to a steady reduction of fresh borrowing. The new Government has emphatically undertaken to carry out a programme of increased borrowing, especially for the financing of State Advances operations. The London money market has apparently acquiesced in the change of policy, and has presumably modified or withdrawn its objections to lending money for reinvestment. It has even apparently been persuaded to accommodate itself to Sir Joseph Ward’s prescription of the terms on which New Zealand stock should be issued. Granting that so much has been achieved, it is pertinent to observe that such complacency in the acceptance of larger loans and the shading of the rate' of interest is less a compliment to the new Giovernmpnt than) a remarkable tribute to the reputation of New Zealand, and especially to the financial administration of , the Reform Party. Something more*, however, is due to it. Sir Joseph Ward has suggested that a mysterious London document would re ; quire some modification of his plans," and his observations have been interpreted as criticism, of his predecessor; It is to be hoped that at the earliest opportunity he will either say definitely how or where Mr Downie Stewart was at fault, or precisely repudiate the unfavourable conclusion. If, as now seems probable, the communication contained nothing more than prudent counsel from the Government’s financial advisers regarding the arrangements to be made for the conversion (of the maturing debt and for any proposed fresh borrowing. acknowledgment should be made that while these may have had “an important bearing” on the Government’s policy, none of the embarrassment was due to the previous Administration. These are, however, matters of domestic concern. Of greater importance is the fact that New Zealand’s credit is so good that London underwriters are prepared to undertake a large new loan simultaneously with a major conversion operation. That is, evidence that the Dominion lias an asset of great value in the confidence of British financiers that boldness in the country’s government will stop short of improvidence. It would be regrettable if anything were done in . eagerness to fulfil election promises that would strain their faith.”