CONVERSION OFFER

Otago Daily Times, Issue 25455, 9 February 1944, Page 2

CONVERSION OFFER

LOAN DOMICILED IN DOMINION ISSUES AT LOWER RATE (P.A.) ’ WELLINGTON, Feb. 8. In a statement to-night the ActingMinister of Finance, Mr D. G. Sullivan, referred to the Government’s proposal for dealing with the debt totalling £9,839,000 domiciled in New Zealand and maturing on February 15, 1946, but in respect of which the Government had an option to repay on or after February 15, 1943. The present stock and debentures bear interest at 4 per cent. “The Government’s proposals are in the form of a conversion offer which is Contained in the prospectus now being issued,” Mr Sullivan said. “Formal notice of the Government’s intention to repay the loan on May 15, 1944, with interest to the date of repayment will appear in this week’s Gazette, and also an order-in-council authorising the conversion offer. “Although the actual conversion does not take effect until May 15,” the Minister said, “ the offer of conversion will be open for one month, that is until March 11. The holders of existing securities are therefore entitled to apply forthwith, but not later than March 11, for the conversion of their existing securities into one or other of the new securities being offered, that is the 3 per cent, stock maturing on April 15, 1960-63, or the 2£ per cent, stock maturing on April 15, 1949-51. In the case of the longer-dated securities the holders are being offered conversion at the rate of £lO3 of new stock for every £IOO of the existing securities, or in the case of the shorter-dated stock £lOl of new stock is offered in exchange for every £IOO of the existing securities. Attention is drawn to the fact that if the conversion offer is not accepted by the holders of existing securities, the amount involved will be repaid in cash with interest to the date fixed in the Gazette notice, that is, May 15 next. “As regards the holders of death duty stock in the present loan,” Mr Sullivan said “this same concession will be available in the case of such persons converting into the new issues, so that the stock will still be available at par for the payment of death duties in the event of the holder dying before the loan matures. The premium offered is designed to bring the interest return to the holders into line with the present market conditions, and as this is not a war loan the Government felt that in fairness to the present holders in this loan the return to investors should be kept in line with the market conditions. “I feel sure,” the Minister addeo. “ that the holders generally will agree that this offer, on the present market conditions, is fair and equitable. It is hoped that all holders of the existing securities will do their part to make the issue a complete success, as such result will enhance the credit of the Dominion at Home and abroad and facilitate the arrangement of war finance later in the year.”