TREASURY BONDS ISSUE

Otago Daily Times, Issue 21774, 13 October 1932, Page 9

TREASURY BONDS ISSUE

CASH APPLICATIONS AN IMMEDIATE SUCCESS LISTS QUICKLY CLOSED " (British Official Wireless.) (United Press Association.) (By Electric Telegraph—Copyright.) RUGBY, October 11. The offer of £150,000,000 of 2 per cent. Treasury bonds, 1935-38, at par, met with prompt success to-day, and the date for the cash applications closed immediately. While cash applications were invited, however,-the issue really represents a conversion operation, preference being given to applications from holders of £140,000,000 of 4i per cent. Treasury bonds due for repayment on December 1. Such holders who exercise the right of exchange into the new 2 per cent, bonds will receive an equal amount of the latter, plus a cash payment of 10s per cent. The announcement of the new conversion issue caused a sharp rise in the British assented war loan, which opened at £lOl 17s Cd and later rose to £lO2 7s 6d.: The market interprets the rise in the new issue to mean that in the official view money. is likely to remain cheap for some time to come. On December 1 the Government has to provide £105,000,000 for the repayment of . the unconverted 5 per . cent, war loan, £140,000,000 for the redemption of 4i per ednt. Treasury bonds, and £13,000,000 for the remaining balance of the per cent, loan. It is assumed that the Government has plans other than the issue of short-term bonds in view for dealing with the baldnce of approximately £108,000,000 which thus remains of this total of £318,000,000. Success had , been expected for the issue of the £150,000,000 of 2 per cent. Treasury bonds, 1935-38, but the closing of the lists almost immediately after they had been opened this morning had a stimulating effect on British giltedged securities generally. There were sharp rises among these, although fluctuation caused by the natural sequel of profit-taking occurred during the busy day. At the close the . gains in British funds were general, ranging from 3-8 to If, with assented war loan finishing well under the best at £lOl 17s 6d. The cash applications for the Treasury’s new bonds reached a very big figure, despite the fact that the 2 per cent, rate was .the lowest offered on a British Government security within memory of the city. • ' ' Calculated so far as the 4-J per cent.. Treasury bonds are concerned, about £3,750,000 will be saved on the service of the National Debt. The recent conversion of the 5 per cent, war loan effected a saving of over £30,000,000, NEW SOUTH WALES LOAN. , J. . ~~ . * / SUCCESS OF CONVERSION. •

LONDON, October 12, (Received Oct. 18, at 1.15 a.m.)

Those who applied for conversion in the New South Wales loan received allotments in full, while cash subscribers received lli per cent, of the amounts applied, for. fsixty-three per cent, of the holders converted their holdings. The cash applications amounted to over £30,000,000.-.

Australian financial circles regard the conversion as more thafi 'satisfactory, seeing that a higher percentage converted than is usual with dominion loans. , Although it is suggested in some quarters that conversion would have been larger if the issue had been kept-open longer than a week the authorities emphasise •that it would. be contrary to London custom to exceed a week. ;

Dealings in the new loan opened at 2} to 24 premium.