THE NEW 4 PER CENT. LOAN.

Otago Witness, Issue 3609, 15 May 1923, Page 41

THE NEW 4 PER CENT. LOAN.

SUCCESSFUL FLOTATION

ISSUED AT 92,

WELLINGTON, May 9. The whole of the details are not yet to hand with regard to the issue of the New Zealand 4 per cent, loan, stated the Prime Minister to-day, but sufficient information has been received to make it clear that the loan has been very successful, and the full amount is already covered. The lists are still open to allow country applications to come, in, when probably allocations will be made pro rata to tile applications received. A new arrangement has been made by which the Bank of England will reduce its charges for inscribing the loan from £2500 per million to £1250 per million, ihe bank is also reducing the annual charges for management to a flat rate of £3OO per million. This applies to all the New Zealand stock managed by the Bank of England. This bank is also refunding a considerable amount cf money which has been charged at the higher rate for this purpose ill past years,, particulars of which will be given in the Financial Statement. The loan just floated has been issued at 92, the rate being 4 per cent., and it is redeemable in 1943 or, at the option of the Government, in 1933, or at any date be tween 1933 and 1943. The issue of 4 oer cent, on the conditions given has the advantage of establishing a particularly low rate for dominion loans, and must have a marked effect on future operations. If our new loan had been issued at 98, at a rate of 4i per cent., with the recent New South Wales currency of 12 years (and we had the option of doing this), the cost., with redemption, would he £4 14s 6d, while the New South Wales issue (94 at per cent.) cost £5 3s 9d. a difference in favour of New Zealand of 9s 3d per cent. per annum. Naturally the shorter* term of 10 or 20 years accepted for the new loan increases the redemption cost as compared with an issue with a longer currency, hut, as a.yainst this shorter currency of the present New Zealand loan, the effect is a saving of £20.000 in compounded stamp duty charges. It is scarcely necessary to add that, what has taken place in connection with this loan proves once again that the credit, of New Zealand is particularly high in financial circles in London.