BRITISH FINANCE

Otago Daily Times, Issue 20022, 12 February 1927, Page 12

BRITISH FINANCE

HBW GOVERNMENT LOAN FOUR PER CENT, CONVERSION ISSUE, (Preei Association —By Telegraph—Copyright) LONDON, February 10. (Received Feb. 11, at 8 p.m.) IB the House of Commons Mr Chufchill announced that £100,785,000 worth of bonds had been converted into new 4 per cent, consolidated loan. The total amount of new stock created was £133,600,000, and the cash proceeds were £69,105,000. The annual interest on the new stock was estimated to show a saving of £492,000 a year compared with the old securities.—A. and N.Z. Cable. The city editor of the Morning Post, in explaining the nature of the conversion operation, states that during the present year a little more than £250,000,000 in debt will mature for repayment, and although much of it does not become due till October, it is always unwise to defer dealing with such maturities until near to the date. The maturing debt is in the form of 5 per cent. Treasury Bonds and National War Bonds, while the new loan is in the form of 4 per cents, offered to cash subscribers at the price of 85 per cent., thus giving a flat yield to the investor of just over £4 14s per cent The stock is irredeemable before 1957, and after that date is only rcdocmabb at par at the option of the Government. An outstanding feature of the issue is the large sinking fund. The Government undertakes for a period of ten years, commencing on May 1 next, so long as :e price of the loan is at or below par, to apply an amount of £2,500.000 during each three months to the purchase of the loan in the market for cancellation.