N.Z. LOAN

Southland Times, Issue 18937, 10 May 1923, Page 4

N.Z. LOAN

TOW INTEREST RATE. SUBSTANTIAL REDUCTION IN BANK CHARGES. (Per United Press Association). WELLINGTON, May W. “The whole of the details are not yet hand with regard to the. issue of the New Zealand 4 per cent, loan,” stated the Prime Minister to-day, “but sufficient information had been received to make it clear that the loan had been very successful, and the full amount was already covered.” Lists were still open to allow country applications to come in, when probably allocations would be made pro rata. New arrangements had been made by which the Bank of England would reduce its charges for inscribing the loan from £2500 per £1,000,000 to £1250 per £1,000,000. The bank was also reduoing the annual charges for management to a flat rate of £3OO per £1,000,000. This applied to all New Zealand stock managed by the Bank of England. The bank was also refunding a considerable amount ot money which had been charged at a higherrate for this purpose in past years, partitulare of which would be given in the Financial Statement. The loan just floated, had been issued at 92, the rate being four per cent, and was redeemable in 1943 or at the option of the Government in 1933 or at any date between 1933 and 1943. The issue of the 4 per cent loan on the conditions given had the advantage of establishing a particularly low rate for Dominion loans and must have a marked effect on future operations. If the new loan had been issued at 98, at a rate of 44 per cent., with the recent New South Wales currency of 12 years (and New Zealand had the option of doing that), the cost with redemption Would have been £4 14s 6d, while ths New South Wales issue 94 at 44 percent.) cost £5 3s 9d, a difference in favour of New Zealand of 9s 3d per cent, per annum. '‘Naturally,” he said “the shorter term of 10 or 20 years was accepted for the new loan increases redemption cost as compared with an issue with a longer currency, but as against this the shorter currency of the present New Zealand loan would effect • saving of £20,000 in compound 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.”