LOAN CONVERSION

New Zealand Herald, Volume LXX, Issue 21506, 1 June 1933, Page 13

LOAN CONVERSION

NEWMARKET SAVING ANNUAL AMOUNT OF £2OBI SCHEME TO BE ADOPTED An annual saving of £2OBI will be effected by the Newmarket Borough Council by a loan conversion scheme adopted last evening, subject to confirmation at the next meeting. It is proposed to consolidate 18 loans into one 4J per cent conversion loan of £119,744 maturing in 1955, with total interest and sinking fund charges of £7326, compared with the previous annual charges of £9407. The total loan indebtedness of the borough is £145,539. Of this sum, £25,795 represents loans from the State Advances Office which cannot bo included in conversion.

" The matter of possiblo dissenters need not disturb the council, as the penalty provided for ' dissenters' should overcome any difficulty of that sort," said the clerk, Mr. H. Wilson. " Should the conversion proposals be rejected, redemption loans totalling £34,446 will have to bo raised between 1937 and 1953." Tho cost to the council of the conversion scheme was estimated to be about £SO.

DRAINAGE BOARD'S POSITION VERY LITTLE BENEFIT LIKELY Very little benefit is likely to accrue to tho Auckland and Suburban Drainago Board in the matter of loan conversion under tho provisions of Part 2 of the Local Authorities Interest Reduction and Loan Conversion Act, according to a report submitted to tho board at its meeting last evening. Dealing with tho loans subject to these provisions, Mr. H. 11. Watkins, engineer-secretary to tho board, said that tho rates of interest in respect to tho Hobson Bay watershed loans, £5500 at 4} per cent, Loan No. 3, £IOO,OOO at 4J per cent, and Loan No. 5, £IOO,OOO at 5 per cent, had been reduced to tho prescribed statutory minimum. The conversion of these loans would therefore confer no benefit on tho board. A saving of -J per cent, amounting to £125 per annum, would, however, be effected in the case of Loan No., 7, £25,000 at 5| per- cent. With the exception of the reduction of the rate of interest in respect of Loan No. 7, said Mr. Watkins, tho advantages to be derived by the conversion of the loans mentioned would be limited to the postponement of maturity dates and sinking fund disbursements, and the opportunity of creating sinking funds for tho conversion loans at rates which would provide for tho redemption of such loans at maturity. It was decided to have prepared a detailed report in this connection for further consideration.