SINKING FUND RATE

New Zealand Herald, Volume LXIX, Issue 21326, 29 October 1932, Page 8

SINKING FUND RATE

TRANSPORT BOARD'S BILL ANNUAL SAVING OF £18.750 An annual saving of £18,750 is anticipated by the Auckland Transport Board in the event of its Conversion of Loan Empowering Rill meeting the support of Parliament. The loan concerned, for an amount of £1,250,000, was issued by the City Council in 1919 in respect of the purchase of the tramway undertaking. The statutory sinking fund was 1 per cent, but wishing to repay the loan as quickly as possible, and the times being prosperous, the council agreed to pay 2i per cent. This rate was maintained by the Transport Board when the trams were taken over from the City Council. The result is that the sinking fund payments have already accumulated to the extent of £572,093. The loan matures on July 1. 1940. The bill now sponsored by the Transport Board is designed to reduce the sinking fund rate from 2.i per cent to 1 per cent. The annual sinking fund payments put aside by the Transport Boaid each year at the rale of 2, per cent total £31.250. If the rate is reduced to 1 per cent the board will have to find only £12,500 each year, so effecting an annual saving of £18,750.