CITY LOAN IN LONDON.

New Zealand Herald, Volume LXIV, Issue 19809, 2 December 1927, Page 10

CITY LOAN IN LONDON.

£450,000 UNDERWRITTEN. ISSUE OF 5i PER CENTS. AT PAR OVER THIRTY YEARS' CURRENCY HIGHLY FAVOURABLE TERMS. Exceptionally favourable terms have been secured by the City Council in the raising of a loan for £450,000. The town clerk, Mr J. 8. Brigham, received advice yesterday that the London office of the ]Bank of New Zealand would underwrite the loan, which will be issued at par, probably on December 8. The loan comprises £310,000 for street improvements. £IIO,OOO for water, and £30,000 for tramways. All these moneys have been authorised and most of the amount has already been advanced from the general account in anticipation of the raising of the loan. The instalments are payable- as follows: —30 per cent on application, 35 per cent, about the middle of January, and 35 per cent early in March. The issue will consist of 5i per cent, debentures, redeemable in 1959, or up to 1961, interest being payable on June 1 and December 1. The net cost of the loan, including expenses and stamp duty, will be approximately £5 8s 9d per cent. The favourable terms secured are regarded as a compliment to the standing of the Auckland City Council on the London money market The terms were almost as good as could be obtained by the Government itself* said Mr. Brigham. At the last councii meeting advice was received that London could guarantee an issue price of 99j or, if conditions should improve, possibly a little better. The Mayor, Mr. G. Baildon, and Mr. Brigham were then authorised to complete negotiations on that basis The fact that the issue will be at par, however, has resulted in & saving of £6148 2s 6c5 in principal and interest in the earler offer.