LOAN CONVERSION

Otago Daily Times, Issue 22058, 14 September 1933, Page 9

LOAN CONVERSION

AUSTRALIAN OPERATIONS NEGOTIATIONS PROCEEDING (United Press Association.) (By Electric Telegraph—Copyright.) LONDON, September 12. Mr S. M. Bruce is launching an immediate conversion loan following negotiations with the Treasury. The amount exceeds £15,000,000. COMMONWEALTH’S CREDIT. IMPROVEMENT IN LONDON. LONDON, September 12. The conversion loan is approximately of £21,000,000, the terms of which are already in the hands of Mr Lyons. It is not only the largest single conversion that Mr Bruce has undertaken, but possibly the largest conversion ever unde"written. Mr Bruce intended until recently to launch only the Commonwealth £15,000,000 6 per cents., but on the flood tide of Australian credit he seized the opportunity for adding the New South Wales and Western Australian 5J per cents. The improvement on the terms obtainable for the previous conversion in June is a measure of the progressive improvement in the Commonwealth’s credit in London. The Treasury’s ban on conversions is still operative, but again it was specially lifted for Australia’s benefit-. The outstanding convertible loans are now only £34,000,000, none of which is above 5J per cent. Further immediate Australian conversions are unlikely, because a big British funding operation is imminent. South Africa is also anxious immediately to enter the market. UNDERWRITING EFFECTED. LONDON, September 13. The Morning Post’s city editor says: “ The underwriting of the Australian conversion was carried through to-day. On the basis of a 21-year period it will yield investors £77 11s. The prospectus will be issued on Thursday and the terms arc pretty much in accordance with market expectations.” STATEMENT BY MR LYONS. CANBERRA, September 13. (Received Sept. 14, at 0.15 a.m.) The Prime Minister (Mr J. A. Lyons), discussing loan conversion, said it was expected that the terms would be 3| per cent, at 98 for 20 years, with an option to the Government to repay after 15 years. The yield to the investor, allowing for redemption after 20 years, was £3 17s lid. The operation covers £15,000,000 of Commonwealth 6 per cent, loan, £4,901,000 of New South Wales 5f per cent, and £1,050,000 of Western Australian 5J per cent. The terms, therefore, represent an appreciable improvement over the previous longterm conversion.