CONVERSION ADOPTED

New Zealand Herald, Volume LXX, Issue 21548, 20 July 1933, Page 12

CONVERSION ADOPTED

ONE TREE HILL BOROUGH ANNUAL SAVING OF SI 48 Conversion of loans domiciled in New Zealand is to be proceeded with by the Ono Treo Hill Borough Council, a decision to this effect having been reached at last evening's meeting of the council. The annual saving will be £l4B, the total net gain over the loan periods being £560, less the cost of conversion. The total gains amount to £789, but against this is a loss of £229 on ono of the four conversion loans so far decided upon. Application has been made to the State Advances Department for particulars of half-yearly payments necessary on a 4i per cent basis to replace existing 4i per cent securities amounting to £15,970. Out of a gross public debt of £153,022, the amount to bo converted totals £SG,27O. The £66,752 not affected includes a loan of £50,000 domiciled in London, and various other amounts on which tlio interest rate is below 41 per cent. The rate of interest on the conversion loans will be 4i per cent, the maturity dates ranging from October, 1961, to September, 1967. The dates at which conversion will take effect vary from September 1 to December 1 this year. Where the 20 per cent reduction provided in the Act leaves the rate of interest still above 4J per cent, the new rate will bo 4i per cent and the difference capitalised and credited to the holders as a premium. In no case will the rate be reduced below 4i per cent. Conversion involves payment of £4591 in premiums, of which £lO9l will be paid in cash and the balance of £3500 by the issue of additional debentures, the latter increasing the public debt by that amount from £145,994 to £149,494. However, it is pointed out that after deducting accrued sinking funds, £14,285, the net public debt remains at a fraction over 4 per cent of the ratable capital value of the borough, one of the lowest figures in the Dominion. In recognition of the extra time and work involved in the preparation of the conversion schemes, the town clerk, Mr. A. Loose, was granted a week's leave of absence.