CONVERSION LOAN

New Zealand Herald, Volume LXX, Issue 21505, 31 May 1933, Page 11

CONVERSION LOAN

AUSTRALIAN SCHEME THE TERMS ANNOUNCED OVER £11,000,000 INVOLVED INTEREST 3A PER CENT By telegraph—Press Association, —Copyright (Received May lid, 8.5 p.m.) SYDNEY, May 110 '.I he amount of the conversion arranged by the Australian Minister in .London, Mr. S. M. Bruce, comprises about £6,100,000 of Now South Wales stock, about/ £'3,000,000 South Australian,- and about £2,000,000 Tasmauian. These aro all optional maturities. Tho Prime Minister, Mr. J. A. Lyons, announced at Canberra to-day that the exact amount being converted is £11,405),96-> of (5.1 per cent stock, and that the new rate will be 3.J per cent at 99. Pie said ho considered these terms satisfactory. The yield to investors, including redemption, would be £3 ]4s 5d per cent,

The conversion, which has the consent of tho British Treasury, will result in a saving to Australia, at current exchange rates, of £.'596,000. The loan will open on Thursday and will close tho same day for cash subscriptions, and the closing date for conversion applications will be Jitpio 10.

The new loan will maturo on March 1, 1938, with the option of redemption in March, 1937. The next batch of conversions probably will aggregate which will carry 6 per cent. It is most unlikely that any attempt will be made before next year to place these on the market

BRITISH TREASURY CONSENT TO OPERATION STATEMENT *BY CHANCELLOR (Received May 30. 5.5 p.m.) LONDON, May 20 The Treasury has issued a statement to the effect that the Chancellor of the Exchequer, Mr. Neville Chamberlain, has agreed to an immediate Commonwealth issue not to exceed five years' maturity, for the purpose of refunding certain 6} per cent Australian loans. Tho Chancellor emphasises that this is an exceptional measure and in no way implies the withdrawal of his request regarding the optional conversion of trustee stocks. MAJOR OPERATION DELAY ANTICIPATED PRESENT CASE NO PRECEDENT (Received May 31. 12.45 a.m.) LONDON, May 30 Mr. Bruce regards the major operation as unlikely until after the international situation stabilises, which is dependent on tho results of the World Economic Conference, and on whether an American debt settlement can be arranged. Jt is understood that New Zealand and South Africa are anxious to operate, but Britain's concession to Australia will not be a precedent. Permission for further Dominion operations is dependent on individual merits.

At the beginning of the present Australian financial year loans held in London which had reached the optional stage amounted to approximately £145,000,000, of which £96,700,000 bore interest at a rate higher than 4 per cent. The conversion last October of £12,92:3,000 of New South Wales 5$ per cent loan, which had matured, loft just nnder £84,000,000. This will be further reduced by the £11,409,00U now to be converted. Other issues at an interest cost making conversion a question of importance are: — Commonwealth, 6 p.c., 1931-41 .. £ 15_,000,000 N.S. Wales, 6 p.c., 19:i0-40 .. 9,500.000 Quconsimid. 6 p.c., 1930-40 . . 2,000.000 S. Australia. G p.c., 1930-10 .. 3,000.000 W. Australia, C> p.c., 1930-40 . . 2,721,000 N.S. Wales, 52 p.c., 1925-35 . . 4,900,000 W. Australia, 52 P- c -« 1930-40 .. 1,000,000 Total • £42,121,000