LOAN CONVERSION

Poverty Bay Herald, Volume LXII, Issue 18757, 13 July 1935, Page 16

LOAN CONVERSION

N.Z. ISSUE IN LONDON VERY SUCCESSFUL INTEREST CHARGES SAVING The Acting-Minister of Finance, the Hon. A. Hamilton, stated in Wellington on Thursday that information now to hand from London in regard to the recent conversion operations indicated that the transaction had been highly successful. It would be recalled, said the Minister, that the conversion transaction related to 5 por cent, stock to the extent of £10,135,800, having final maturity date at July 1, 1945, but in respect of which an option of redemption on or after July 1, 1935, obtained to the Government. Mr Hamilton went on to say that in conformity with the Government policy of seeking every avenue whereby saving in interest charges might be effected a favorable opportunity of arranging conversion of portion of the overseas debt to a lower interest rate was taken at the earliest possible date, and the result achieved might, bo regarded as quite satisfactory. In order to facilitate conversion and to ensure the most favorable terms, stated, the Minister, the Government decided to reduce the .conversion operations to £8,000,000. having made provision for paying off holders of the balance of the loan, namely, £2,135.800. The prospectus of the new loan carrying interest at 3 per cent, and which was issued at 98J was made public on the morning of July I—cash applications opening at- 9 n.m. Thus, said Mr Hamilton, the list for cash subscriptions was open for half an hour only, and the total subscriptions amounted to £10,148.000. The magnitude of the cash subscriptions taken in conjunction with conversion applications from a majority of holders of the 5 per cent, loan clearly indicated the position which New Zealand’s credit enjoyed on the London market. The Minister concluded by stating that-, allowing for costs incidental to conversion and also- of providing for the payment in London in respect of the £2.135,800 redemption, tho saving to the New Zealand Government will be considerably over ] per -cent, per annum when compared with the original charges.