BORROWING IN AMERICA.

New Zealand Herald, Volume LXIV, Issue 19608, 9 April 1927, Page 9

BORROWING IN AMERICA.

NEW SOUTH WALES ISSUE. ANOTHER LOAN OF £5,000,000. > (Received April 8„ 7.30 p.m.) A l , and N.Z. NEW YORK. April 7. 1 The Equitable Trust Company announces that it has purchased an issue of 25,000,000 dollars (£5,000,000) of New South Wales bonds, and within a week or ten days will offer the loan to the public on terms to be announced later. It is understood that the loan will be in 5 per cent, dollar bonds with a currency of 31 years, of the same general description as the previous issue, including provision for a sinking fund. Apparently the loan has been undertaken Iby the same group of financiers as the previous issue. Opinion in Wall Street doubts whether the net return to New South Wales will be 94 per cent, or better, the contention being that the intrinsic conditions of marketing foreign bonds are such that to underwrite the issue at these figure.} would be unprofitable. Observers admit that the expectation of becoming the permanent American financial agents or advisers of New South Wale 3 may induce the Equitable Trust Company to offer exceptionally attractive terms in the hope of securing the State's future American financing. It is believed, indeed, that i the Equitable group has an understanding that this will be the case. ;; | ■■ _> - Last year, New South Wales issued two loans, each of £4,000,000, in London, both being 5 per cent, 1945-65 stock. The first was offered in March at 98; the underwriters had to take up 70 per cent. The second, issued in September at 87, was no more successful, 84 per cent, being left with the underwriters. At the end of January it was announced that the New South' Waies Government had sold an issue of 25,000,000 dollars in New York and that the proceeds would be used to meet commitments in London. The issue was offered to the public on February'2 by the Equitable Trust Company, Harris, Forlbes and Company, the First National Corporation of Boston, and. Easterbrook and Company, in 30-year bonds at 5 per cent., the price of issue being 86£. This gave a yield to the investor, including redemption, of about 5i per cent. The lists were opened and closed simultaneously, the loan being largely oversubscribed. The terms provide for an annual sinking fund of § per cent. A statement regarding the loan was made in the Legislative Assembly bv the State Premier and Treasurer, Mr. Lang, on February 8. He said the Government had been advised that owing to other Dominion loans having the right to be placed on the market prior to a New South Wales loan, there would be no possibility of being able to raise funds there prior to the conversion operations in respectof loans amounting to £11,000,000 which would fall due in June and July- The Government accepted an unsolicited offer bv the Equitable Trust Group to purchase a £5,000,000 issue at a net price of 93.277 per cent., which was slightly more than 2i- points better than the quotation obtained by the State's advisers in London. The interest cost to the Government, including redemption, would be £5 8s lid per cent. Victoria is also contemplating another loan abroad, and the Under-Secretary to the State's Treasury, Mr. H. A. Pitt, has recently been in consultation with New York financiers. Interviewed in New York ten days ago, Mr. Pitt said he had found American financiers greatly interested in Victoria He had endeavoured at preliminary conversations to give them information concerning-the methods of expending past Victorian loans,- and had shown that the loans contemplated were to be utilised on public works and developmental undertakings. When asked to confirm a Wall Street report the loan conditions in New York make it impossible for any financial house to advance funds to an Australian State showing a . greater net return than per cent, to, the borrower, Mr. Pitt said he had not yet discussed the question of terms. Victoria would borrow 'in New York only if the rate was better than London. The fact that Dominion bonds were approved trust funds in England, but not in New York, would inevitably have considerable effect in determining the interest rate.

COMMONWEALTH FINANCE, LARGE CONVERSION LOAN. THE ISSUE UNDERWRITTEN. (Received April 8, 11.20 p.m.) A. and N.Z. LONDON. April 8. The Commonwealth conversion loan of £11,711,000, at 5 per cent., at 98, has been underwritten. Commonwealth loans aggregating £12,750,000 fall due for redemption on June 1.

CANTERBURY MARKETS. THE POSITION OF WHEAT. {by telegraph.—press association.] CHRISTCHUECH. Friday. Merchants state that the past week has been particularly slow for . business, very few orders coming to hand, and they are expecting a quieter time during the period directly ahead, than was experienced in the past few months. Having sufficient on hand to satisfy all requirements for some time to come, millers are displaying no anxiety to buy wheat. Growers - dissatisfied with the prices offering ;u:e in many cases putting their wheat in. store, having been advised that they will be wise to do so. Wheat is still quoted at 5s Id, 'and in some instances 5s 2d per bushel, on trucks, to farmers, at country stations The millers' ideas of the question are naturally very different from those of the growers. They state that in view of many good returns that are evident in Canterbury to-day growers can afford to accept a lower figure than they got last season They state further that while they are now paying 5s Id they were previously giving 6s, and consequently the average is about 5s 6d. A number of farmers who were offered 6s some time ago refused to accept that figure, anc! a good proportion of them are now storing their wheat in anticipation of a better price later. Oats have shown a little more life during the past- few days, although there is perhaps no quotable difference. Chan has livened up in sympathy, being now worth at least £3 10s per ton. Partridge peas are also a little brighter, being quoted at 7s per bushel, on trucks, at country stations ... i * The Wingatui, which left this week for Auckland, took over 2800 sacks of potatoes, and the Waipiata expected to take about 4000 sacks Some merchants claim that the market is bettor than it was a few days ago, On the other hand another merchant said to-day .hat while potatoes were sold at 80s, i.o. D., 5.1., fjytfcclton, for May-June delivery, they could be bought by merchants later at 6d The price to farmers to-day is from £3 10s to £3 15s on trucks, at countrv stations. Dissatisfaction is also expressed by growers at the prices - offered tor onions, namely, is 6d Were it not for the fact that many are short of money they would prefer to hold on to them until later in the season.