LONDON CONVERSION

New Zealand Herald, Volume LXXIII, Issue 22403, 27 April 1936, Page 10

LONDON CONVERSION

The first financial operation to be attempted in London by the present Government is foreshadowed in a cable message published to-day, predicting a conversion operation to deal with some £6,000,000 of New Zealand 6 per cent stock in respect of which an option of redemption matures this year. This sum would have been dealt v with no matter what Government was in power. The chance to reduce a 6 per cent rate to something more in keeping with the present London price of money could not have been neglected in any circumstances. According to the forecast, the terms offered to the market will be virtually the same as those which proved quite acceptable last year when New Zealand asked for cash or conversion offers for £8,000,000, the new stock being issued at 3 per cent at £9B 10s for 17 to 20 years. It is indicated that a slightly longer term will be sought this year, but the exact discount at which subscription will be sought has naturally not yet been divulged. New Zealand is possibly seeking slightly better terms than were obtained a year ago. The issue then was an immediate success, the cash offers alone being some £2,000,000 greater than the total involved. This fact has probably emboldened the Government to ask just a little more from the market, though it may be taken for granted that the best possible advice was obtained before the terms were settled. The high level of New Zealand's credit has been proved in a most gratifying way by the earlier operations. There is no reason to think it is not just as high to-day, and the conversion will give an interesting opportunity of testing thiß.