Page 12 Advertisements Column 4

Sun (Auckland), Volume III, Issue 690, 15 June 1929, Page 12

OF ABRIDGED PROSPECTUS The First National Mortgage Bond Corporation Limited To be Registered Under The Companies Act. 1908. Dated I Ith June. 1929. Filed 1 Ith June. 1929. Adopting the Soundest and Most Up-to-Date Methods of Mortgage Finance CAPITAL - £250,000 Divided into 100,000 6 per cent. Cumulative Preference Shares of £1 each, and 130,000 Ordinary Shares of £ 1 each. 100,000 ORDINARY Shares, together with I 00.000 PREFERENCE Shares, are now offered to the public for subscription, and 50,000 ORDINARY Shares are reserved for future issue. The terms of subscription are as follow: PREFERENCE SHARES 2/- per share on application, and the balance on allotment: or alternatively, 2- per share on application, 2- on allotment, and the balance in calls not exceeding 2/- per share at intervals of not less than one month. ORDINARY SHARES 2- per share on application, and 1 - per share on allotment; and the balance in calls not exceeding 1 - per share at intervals of not less than one month. NO PROMOTERS’ SHARES. No consideration of any kind has been given or promised to anyone in connection with the promotion of the Company. Brokerage only is payable for procuring subscriptions for shares. FIRST DIRECTORS : H. T. MERRITT. Esq., Merchant. Auckland. S. J. HARBUTT. Esq., Manufacturer, Auckland. D. F. Ret ired T. U. WELLS. Esq.. Retired. Auckland. F. RESTALL. Esq.. Cocnpanv Manager, Auckland. MacCORMICK. Esq.. Bank Manager, Auckland. Solicitor : W. T. F. KELLS MASON, Esq.. Solicitor, Auckland. Bankers: THE NATIONAL BANK OF NEW ZEALAND, LIMITED. Interim Secretary: G. F. PARKES, F.C.1.5., F.A.1.5., Premier Buildings, Durham Street, Auckland. GENERAL Consulting Counsel: G. P. FINLAY. Esq.. Barrister, Auckland. Auditors : HUTCHISON, ELUFFE & CAMERON, Premier Buildings, Durham Street, Auckland. Organ is in a Underwriters : ASSOCIATED INVESTMENT UNDERWRITERS (N.Z.) LIMITED. Premier Building's. Durham Street, Auckland. OBJECTS. Primarily this Corporation is being formed to carry on the business of a Mortgage Bond Company, adopting the most modern methods of lending money on real estate, and splitting up these mortgages into Bonds of convenient denominations, thus rendering the best class of mortgage security available to investors generally. Briefly, the objects are: To make advances on approved securities. To accept from the borrower Mortgage Bonds, and reissue same to the public with or without the Corporation's guarantee. To transact business as capitalists, promoters and financial and monetary agents, both in New Zealand and elsewhere. To act as Trustee for Bond and Debenture Holders. To afford Shareholders a diversification of investment, a principle which has long been recognised as one of the first requisites of a sound investment policy. Generally, to supplement the existing facilities for mortgage finance, and to further the economic progress of the Dominion by the judicious application of organised capital. PURPOSES OF THE CORPORATION. The main purpose of the Corporation is to throw open to the general public a fresh avenue of investment, namely, real estate Mortgage Bonds. In the safeguarding and distribution of these Bonds the Corporation intends to introduce the principles and system which form part of the standard practice to-day in Great Britain and America, and. which have contributed in no small measure to the widespread popularity of such Bond? in those countries. Hitherto, mortgages of the best class on the highest type of improved city properties and productive rural lands could be taken up only by the wealthy and the large institutions because of their very size; but now, with the advent of the “ First National Mortgage Bond Corporation Limited.” the plan will be adopted of splitting up these large mortgages into Bonds of convenient denominations, thus rendering such classes of mortgages available to investors generally. The policy to be adopted by the Corporation will bo the most modern method of lending money on real estate. Tt represents the most up-to-date improved form of the old time-tested system; it combines the safety, stability and attractive interest rate of the old-fashioned mortgage, with the convenience and availability of the best class of Bonds. The Corporation will pay particular attention to the adaptation of amortisation to lending on mortgage, the underlying principle being that the borrower shall pay off a portion of the principal of his Bonds each year. This amortisation is accomplished either by serial maturities, part of the Bonds maturing annually, or by sinking funds whereby the borrower must reduce the principal annually by purchasing Bonds in the opeu market •or by calling Bonds by lot. The aim of the Corporation will be to ensure regular payments sufficient to meet the due proportions of principal and interest, and thus secure a constantly increasing margin of safety. Nearly all the real estate the Corporation will sponsor will be covered by Bonds of its own origination; that is, the Corporation will purchase or underwrite an issue with its own funds direct from the borrower—the owner of the mortgaged property. All Bonds issued, underwritten or purchased will be protected by an adequate equity or margin of safety based on conservative appraisals of the property securing it. The investigation of each issue before underwriting or flotation will be thorough and exhaustive. The Corporation will examine thoroughly the construction cost, soundness and earning power of each property. Particular emphasis will be placed on the importance of earning power, which is the basis of all value. Nowadays, the lending of moneys is tending more and more to become the business of institutions and ompanics rather than that of the private individual. In proof of this wc have the State Advances Department, the Public Trustee, Intermediate Credits Association, the Associated Banks, the various Building Societies, and the Loan, Mortgage and Finance Companies. The reason for this is that the company usually brings greater skill to bear on the scrutiny of investments than can a private person, as generally it is a matter foreign to his ordinary business. The finding of fitting investments and securities is one of considerable difficulty to the average lender, and the use of the Corporation's organisation is sure to appeal to lender and borrower alike. The funds of the organisation will be continually employed. By foresight and an energetic management no funds will ever be allowed to lie idle. The Corporation will offer to investors a continuity of investment, lack of which has in the past been a serious drawback, and in many cases the cause of loss and hardship to investors and those dependent on them. From the investor's point of view the modern method has many' advantages:— (1) The interest is paid to the investor promptly and regularly, and free from expense or deduction. (2) His capital is Dover lying idle awaiting rein vestment and losing interest. He is nol continually called on to consider rearrangement and revaluation of securities. (3) His investment, or any part of it, is readily negotiable at any time; with a minimum of expense he can realise on his security- A mortgage, on the other band, is not so readily sold because the seller has to find a person who has precisely the amount required willing to invest in the particular class of security', and whose advisers approve of the particular form in which the mortgage is drawn. All these factors militate against the ready sale of a mortgage. (4) With a mortgage he has to watch the s€ curitv itself and its maintenance, attend to the personal collection of interest (or pay someone else to do so), suffer the invariable delays in payment, supervise the insurances and the pay'ment of premiums, and, in the event of the failure of the mortgage, be prepared to finance the repossession of the security. Lastly, all these things mean that the net annual return for the money is always less than the apparent value of the return as expressed in the mortgage. With a Mortgage Bond the trace value of the interest is net, subject to no deduction, and free from worry, delay and idle capital. Applications will be received only in accordance with the terms of the full Prospectus, and on the Application Form issued therewith. Full Prospectus, Information, and Form of Application for Shares may be obtained from Associated Investment Underwriters (N.Z.) Ltd. PREMIER BUILDINGS. DURHAM STREET. AUCKLAND. ASSOCIATED INVESTMENT UNDERWRITERS (N.Z.), LTD. . Premier Buildings, Durham Street, Auckland. i Please send me, without obligation. Prospectus, Full Information, and Form of Application for Shares. i Name | Address l sa _ •. _ _• _i THE SUN FREE ACCIDENT INSURANCE is the most liberal in the Dominion