AUSTRALIAN LOANS

New Zealand Herald, Volume LXX, Issue 21596, 14 September 1933, Page 9

AUSTRALIAN LOANS

CONVERSION OPERATION IMMEDIATE LAUNCHING £21.000,000 INVOLVED TERM OF 20 YEARS By Telegraph—Press Association—Copyright (Received September 13. 6.5 p.m.) LONDON, Sept, 13 The Australian Minister in London, Mr. S. M. Bruce, is launching an immediate conversion after negotiations with the Treasury. The City editor of the Morning Post savs the underwriting of the conversion is to be carried through to-day on the basis of a 20 years' period. The yield to investors will be £3 17s lid per cen*t. The prospectus is to be issued tomorrow. Tho terms are pretty much in accordance with the market's expectations.

This Australian conversion loan of about £21,000,000, the terms of which are already in the hands of Mr. J. A. Lyons, the Prime Minister, is not only the largest single conversion Mr. Bruce has undertaken, but is possibly largest conversion ever Underwritten.

Mr. Bruce had intended until recently to launch only the Commonwealth 6 per cent issues totalling £15,000,000, but on the floodtido of Australian credit seized the opportunity of adding tho New South Wales and Western Australian 52 per cent loans. The improvement on tho terms obtained for the previous conversion in June is tho measure of t&o progressive improvement of the Commonwealth's credit in London. The Treasury's ban on conversions is still imperative, but this has been again specially lifted for Australia's benefit. Outstanding convertible loans now total only £32,000,000, none of which aro above 5J per cent. Further immediate conversions aro not likely, because a big British funding operation is imminent. South Africa is also anxious immediately to enter tho market. RATE OF INTEREST PROBABLY 31 PER CENT THREE LOANS COVERED (Received September 13. 10.45 p.m.) CANBERRA, Seijt. .13 The Prime Minister, Mr. J. A. Xyons, discussing the conversion operation, said it was expected that the terms would be 3$ per cent at 98 for 20 years, with the option to the Government to repay after-15 years. The yield to the investor, allowing for redemption after 20 years, would be £3 17s lid per cent. The operation covers the £15,000,000 Commonwealth 6 per cent loan, £he £4,901.000 New South Wales 5J per cent, and the £1,050,000 Western Australian 5J per cent. The terms, therefore, constitute an appreciable improvement over the previous longj-term conversion.