MATURING CITY LOANS.

Otago Daily Times, Issue 18420, 5 December 1921, Page 4

MATURING CITY LOANS.

It is a matter for great satisfaction that the City Council has already been able to secure subscriptions for the redemption of the whole of the loans which, amounting ■ to about £426,600 net, mature in March -next. The existence of a serious financial stringency necessarily made raising of a sum of this magnitude, even, on the terms offered by the corporation, a matter oi considerable anxiety. The success of the council in thus early obtaining the funds that are required by it is attributable in large part, we suggest, to a very laudable spirit of what may be termed local patriotism. The chairman of the Finance Committee, whose activity in directing the redemption loan proposals and in emphasising the

unexceptionable- nature of the security _ merits recognition, will doubtless analyse the subscriptions at the meeting of the council this week, showing how. much is represented \>y renewals of the ; maturing debentures and how much by new money. : The corporation was for-, innate- a year ago in arranging with; one institution, which hold some £90,000 of the maturing debentures, to exchange these for a parcel of the new issue to a - corresponding amount ,at ’6§. per cent.,' and there seems been a treasonable readiness on the part of other holders of the maturing bonds to accept debentures - in the fresh rissue at tha» rate of 6 per cent., which the corporation has, this year had to offer. The accrued sinking fund, which is being applied in. part redemption of the old loans, itself amounts to about £90,000. It was in a favourable market that the old loans raised. They were secured at 4 per cent, as to £205,800 and at 4£ per cent."as to £310,400. The fact that they are maturing so inopportunely, when money is scarce and dear, will, of course, involve the city in an, increased expenditure in fixed charges during the currency of the new loan. The loss in this respect will, however, be smaller than there Was at one time some reason to apprehend it might be, and in all the circumstances, particularly in those ... which affect the financial situation, the City Council is to be congratulated upon - the completion of its plans for the isS&e of the redemption loan.