HARBOUR BOARD LOAN

New Zealand Herald, Volume LXX, Issue 21414, 11 February 1933, Page 13

HARBOUR BOARD LOAN

NEW REPAYMENT SYSTEM HALF-YEARLY INSTALMENTS The Order-in-Council consenting to the raising by the Auckland Harbour Board of a redemption loan of £IBI,OOO on the instalment repayment system represents a new departure in the practice of the board regarding loans. In previous loans, provision for the repayment of principal has been made in the accumulation of a sinking fund. It was stated yesterday that, prior to the provisions of the Finance Act of May, 1932, local authorities other than harbour boards had the power to practise the instalment system of payment. Harbour boards were given this power under the Act. The raising of the present redemption loan has been the first occasion on which the Auckland Harbour Board has had the opportunity to use the new system of half-yearly repayments of principal and interest. The rate of interest of the loan is not to exceed £5 5s per cent, according to the Order-in-Council, the loan being repayable over a period not exceeding 20 years by equal aggregate half-yearly instalments, calculated at the rate of not more than £4 Is 5d per cent on the amount of the loan, and subject to a condition that the board should not enter into any contract for payment outside New Zealand of any instalment due on the loan It was stated yesterday that the renewal loan fell duo on January 10 on £250,000 in London, that sum being raised about 20 years ago under the Auckland Harbour Board Empowering Act, 3911, as part of the board's programme of works. The sinking fund provided £94,000. The figure of £IBI,OOO in the redemption loan was made up of the balance of payment, the cost of exchange and the loan issue expenses. The exchange cost amounted to about £24,000, the board being fortunate in working on the 10 per cent rate before the recent increase to 25' per cent. The money for the redemption loan had been arranged for in New Zealand,' the board's financial advisers stating that there was at present no possibility of finding the amount in. London.