THE CONVERSION LOAN

Otago Daily Times, Issue 24633, 14 June 1941, Page 8

THE CONVERSION LOAN

This is the day on which applications will close for the conversion of Government securities that .will mature either this year or next year. The Minister of Finance has intimated that the applications for conversion that have so far been received total * £ 17,034,000, and that the requests for repayment of loans amount only to £240,000. This may be regarded as a satisfactory response, but as the terms of the conversion plan were quite attractive it is rather surprising that it does not now seem likely that investors have taken greater advantage of the Government’s offer which, it will be recalled, covers loans to an aggregate amount of £21,250,000. While it is gratifying that the investors of a very large proportion of the amount of the issue have decided in favour of acceptance of the Government’s offer, there would, from the national point of view, be a distinct advantage in the successful completion of a conversion loan of the magnitude of this one. Not even the Minister of Finance can foresee the extent to which the Government may have to appeal to the market for funds for emergency purposes. It is already known, however, that it will be necessary to float a second war loan this year. The danger that the Government might be involved in some embarrassment, if it had to make provision to meet maturing loans of considerable volume at a time when it was necessary to raise fresh loans for war purposes, is sufficiently obvious. It would consequently have been in the public interest if the investors of the whole amount represented in the conversion offer had seen their way to accept fresh securities in' place of those now held by them.