£21,000,000 ISSUE

New Zealand Herald, Volume LXXVIII, Issue 23965, 15 May 1941, Page 8

£21,000,000 ISSUE

CONVERSION OFFER ; HOR 3 PER CENT • -—- PREMIUM ON LONGER TERM THREE MATURING LOANS [BT TELF.r.PAPH —FRKSS ASSOCIATION] WELLINGTON. Wednesday The conversion of Government loans totalling £21,000.000 of debt domiciled in New Zealand is being undertaken, according to an announcement by the ■ Minister of Finance, the Hon. W. Nash, in an interview to-day. Mr. Nash said the offer to convert was addressed to holders of the following Government securities 'Three per cent stock and debentures maturing on July 15 this year, 33 per cent stock and debentures maturing ori November lo this year, and 3J per cent and 4 per cent stock maturing on March 15, 1943. These holders were invited to apply forthwith, and in any case not later than June 14, for the conversion of their holdings in any or all of these loans into new 3J per cent stock maturing in 1957-60 at the rate of £lO3 of new stock for every £ 100 of old stock surrendered, or, alternatively, into shorter dated 3 per cent stock maturing in 1946-48 at par. { Dates o! New Issues Applications for conversion, said Mr. [Nash, were required now, but would | take effect in respect of each of the | three loans as iollows:—Three per cent, | July Jo. 1941. on July 15. 1041; 3? per i cent, November 15, 1941, on August 10, | 1941; 3J and 4 per cent, March 15, 1943, on September 15. 1941. j Interest on the old loans, said Mr. | Nash, would, of course, be paid up to | these conversion dates, and interest on | the new loans would commence from j those dates. . " The Minister explained that the first ! mentioned date was the final maturity date of the loan, while in the case of the other two loans formal notice had been given of intention to repay them on August 15 and September 15 respectively. This meant that if the oiler of conversion was not accepted by June 15 the holder would be repaid in cash with interest to the date of settlement. Return to Investors Mr. Nash added that a valuable, concession was being offered to those accepting the conversion, whereby they could stipulate that the whole or any portion of the new conversion stock should be available at par for the payment of death duties in an estate in the event of death occurring -before the loan matured. The return to investors from the new securities, allowing for the premium, was £3 9s 3d per cent in the case of the longer-dated issue, and 3 per cent from the short dated securities. These terms were practically the same & as the national development loan now on the market. Taking all the relevant factors into consideration, continued the Minister, the Government felt that the conversion terms were straight-forward and fair, and it was confidently anticipated | that holders of the securities affected would accept the offer and so ensure the success of what was one of the largest conversion operations ever undertaken in the Dominion. Mr. Nash added that success in these j operations would clear the decks of the i maturing debt for the dura- ! tion of the war and be a material factor | in securing the financial stability which ! was so essential a factor in a sustained war effort.