A HARBOUR LOAN

New Zealand Times, Volume XXXI, Issue 6870, 14 July 1909, Page 9

A HARBOUR LOAN

THE • NEW PLYMOUTH FLOTATION

Mr J. B. bmroeft, chairman of the New Plymouth Harbonr Board, who recently returned from London, explained to the board on Monday the procedure of Mr Newton King (treasurer) and hunSelf in regard to the flotation of the board's loan;. He said Mr King and himself had gone to Wellington, instructed by the board, to find what terms were offering’ in New Zealand for the loan. The best offer was 98, at 4i per cent., which would give 94 net, the charges being estimated ,at 4 per cent. This offer was from the Bank of New Zealand, and in making it the manager said that there was little likelihood of the quotation altering very much one way or the other, and the .board heed expect nothing bettor. So he called a special meeting, and the board decided to send Mr King and himself to London-. Upon arrival they loot no time. They had introductions from Sir Joseph Ward to the leading financial people, and they were also able to consult the High Commissioner's office. The Bank of Now • Zealand agency id London merely repeated the terms quoted here. And although they consulted pretty well everybody _ who was worth consulting, ho 'one would look at the loan at 4 per cent. Scrirngeour's people said they could try it if the delegates insisted, but could promise only 'J- or 93, if it issued at ail. They pointed out that to place the loan on the market at such a price would be bad business not only for the board, but for the whole of the New Zealand securities. It would be far better, they urged, to issue at 4i per cent. The delegates went into the _ question very_ carefully. They were anxious to avoid a rate, and it could not be avoided if they issu ed the. whole loan at 4} per cent. They worked out, too, that the .£300,000 .at 4 per cent, would.pealles ,Je6B than .£375,00( St iii*f i»nt. Bo.tlnw decided to reduce Hie ambunt. bf the loan, thus . avoiding the. lAth. Thfey got the. sufie offer again mjtg, With. 4 tfSt 'dent..flotation expenses They Stack hht fief 102 s .and eventually brought the dSSr Up to HU. They afeo persuaded the bank and the undfefwririere to reduce their chargee, eo that ia-l

stead of the flotation expenses being i pcfr cent, they were only ,£3 per .fifOO. This offer was thus X 4 per «£IOO better than they had been offered m the Dominion. The bank manager advised them to close, assuring them they woujd not be able to do better, lint delay occurred from various causes. At one time, owing to the effect of the Turkish troubles on the money market, it was likely that the uiderwriters might drop out, and they had nothing m writing. The bank manager interviewed the underwriters himself, for he thought that had the de.ogates gone the dealings might have come toon abrupt endingIn the end they allowed the bank, to complete.