LOAN AT 3 PER CENT

New Zealand Herald, Volume LXXI, Issue 21912, 22 September 1934, Page 12

LOAN AT 3 PER CENT

OTAGO HARBOUR BOARD LOWEST RATE RECORDED [BY TELEGRAPH —PRESS ASSOCIATION] DUNEDIN, Friday The low interest rate of 3 per cent for a loan of £IO,OOO has been secured by Otago Harbour Board. The chairman said it was the cheapest loan raised in New Zealand. With the present abundant supply of cheap money and tho difficulty confronting investors in securing investments showing any but a nominal return, local bodies have found it easy in recent months to secure loans at exceptionally favourable rates. Recent loans raised by local bodies, both in the North and South Island, have in most cases been under 4 per cent, but the rate secured by tho Otago Harbour Board is tho lowest yet recorded. Tfye reduction in interest rates and the saving it has meant to local bodies is exemplified in the fact that prior to the statutory reduction of 20 per cent, or to a minimum rate of 4J per cont- on existing loans, the interest rates on tho gross internal local body debt varied from 4 per cent and under to 6J per cent. The major amounts were grouped at 5J per cent, 6 per cent, 5J per cent, 5J per cent, 5 per cent and 4J per cent in descending order. , ,

In keeping with the trend of the market, tho Local Government Loans in May last announced that the rate of interest for new loans raised by major local bodies would bo 3$ per cent, with an intermediate rate of 3 7-8 per cent and a maximum of 4 per cent for local authorities of the smaller classes. Since then several local bodies have raised loans at rates of interest which are tho lowest recorded by the respective authorities. These include: — Wellington City Council, £24,000 at 33 per cent and 1J per cent sinking fund; Auckland City Council, £B2OO at 3} per cent; Devonport Borough Council, £5400 at 3 7-8 per cent; and Invercargill City Council, £7OOO at 3J per cent.