BIG CONVERSION LOAN

Te Awamutu Courier, Volume 53, Issue 3823, 19 October 1936, Page 5

BIG CONVERSION LOAN

LONG AND SHORT TERM SECURITIES OFFERED. PROSPECTUS ISSUED BY RESERVE BANK. Details of arrangements completed by the Minister ot Finance, Hon. W. Nash, before his departure for England for the repayment at par or conversions on January 15 next year of approximately £12,400,000 of 4 per cent New Zealand Government stock and bearer debentures have been announced officially. The loans, which are mainly domiciled in New Zealand, fall due on January 15, 1940, but the Minister has the right to repay at any time within three years prior to the maturity date on giving three months’ notice in the Gazette. A special Gazette gives official notice of the Minister's intention to exercise this option, and the date of repayment is fixed at January 15 next year. The terms of the Government’s big conversion loan were eagerly awaited in financial circles. The prospectus issued by the Reserve Bank of New Zealand announces an issue of £13,930,000 ill the form ol either 34 per cent stock or debentures, repayable 1953-1957; or 3 per cent stock or debentures repayable 1939-1941 for payment in cash or in exchange for holdings of 4 per cent stock and debentures. 1937-40. Interest is payable half-yearly at the Reserve Bank of New Zealand on January 15 and July 15. A first payment, being a full half year’s interest on each loan, will be made on July 15, 1937. It not previously redeemed, the stock and debentures of the new issues will be repaid at par at the Reserve Bank of New Zealand on January 15, 1957, as regards the 3 J per cent 1953-1957 loan, and on July 15, 1941, as regards the 3 per cent 19391941 loan; but the Minister of Finance reserves the right to repay, at par, the 3 1 per cent Irfan at any time on and after January 15, 1953, and the 3 per cent loan at any time on or after July, 1939. subject in each case to three months’ notice of his intention to repay having been given' in the New Zealand Gazette. REDEMPTION OF LOANS. The proceeds of the new issues are to be utilised for the redemption of the 4 per cent New Zealand Government loan, 1937-1940, totalling £12,426,675 6s lid, of which public notice of redemption on January 15, 1937, has been given by the Minister of Finance in terms of section 15 (1) of the New Zealand Debt Conversion Act, 1932-33, and also for the redemption of securities amounting to £l,530,000 issued in respect ot the repayment in London on September 15, 1936, of the Southland Electric Power Board 5 per cent and 6 per cent guarteed debentures, 1936-1954. The stock and debentures will be issued pursuant to the provisions of the New Zealand Loans Act, 1932, whereby the interest and principal are a direct charge upon the public revenues of the Dominion. The ultimate repayment of the public debt of the Dominion is, in the main, provided for under the Repayment of the Public Debt Act, 1925, under which New Zealand's debt reduction resources are made available to purchase New Zealand Government securities on the open market for cancellation or to pay them off at maturity, thereby ensuring an actual reduction in the public debt annually. For this purpose there is issued annually out of the Consolidated Fund a sum equal to J per cent of the debt affected, and to this is added a sum equal to interest at 34 per cent per annum of the debt paid off under this scheme. The Repayment of the Public Debt Act applies to the major portion of the Dominion’s debt, certain loans for which adequate sinking fund provisions are specifically provided and the portion of New Zealand's war debt funded with the Imperial Government having been excluded from the debt repayment scheme. CASH APPLICATIONS. The price of issue for both loans is £lOO per cent, payable £4 per cent on application and £96 on January 18, 1937. Cash applications will be received at the Reserve Bank of New Zealand, Wellington; at any branch of the Bank of New Zealand in the Dominion, or at any postal money order office in New Zealand, and must be accompanied by a deposit of £4 per cent of the nominal amount applied for. Applications for either stock or debentures must be for sums of not less than £5O or for a multiple of £5O. Bearer debentures will be issued in denominations ot £5O, £lOO, £5OO and £lOOO. In the case of partial allotment the surplus from the amount paid as deposit will be refunded to the applicant. Payment in full of the balance due may be made at any time prior to January 19, 1937, but no discount or interest will be allowed in respect ci any such prepayments. Failure to complete payment by that date will render the amount previously paid liable to forfeiture and the allotment to cancellation. OFFER OF CONVERSION. Holders of 4 per cent New Zealand Government stock and debentures, 1937-1940, are offered conversion in whole or in part into an equal nominal amount of either: (a) 3J per cent New Zealand Government stock or debentures, 1953-1957; or (b) 3 per cent New Zealand Government stock or debentures, 1939-1941; issued in accordance with the terms set forth in the prospectus. Holders who convert will receive the usual six months’ interest on the 4 per cent stock or debentures on January 15, 1937, and in respect of the new securities will receive a first half year’s interest on July 15, 1937. Death duty stock converted in terms of this offer will be replaced by stock having the same condition of availability for the payment of death duties attaching thereto. Holders accepting the offer of conversion must transmit their applications on the prescribed forms to the Reserve Bank of New Zealand, Wellington, or lodge them with any branch of the Bank of New Zealand or at any postal money order office in the Dominion for transmission to the bank. Applications for conversion must be accompanied by any relative documents of title, such as debentures (with interest coupons intact in respect of the period subsequent to January 15, 1937), or certificates of title to stock in cases where such cer-

tificates have been issued. From the date of the closing of the list for conversion applications until January 15, 1937, such converted holdings will be regarded as “assented” stock or debentures respectively. Any 4 per cent stock or debentures subject to this offer and not converted will be repaid at par on or after January 15, 1937, on presentation to tile Reserve Bank of New Zealand, Wellington, in the case of stock, of a request for redemption, accompanied by the relative documents of title (if any), or on surrender to the Reserve Bank or to any branch of the Bank of New Zealand in the Dominion of debentures with interest coupons intact in respect of the period subsequent to January 15, 1937. No interest will accrue on stock or debentures of the 4 per cent 1937-1940 issue after January 15, 1937, and coupons for any period subsequent to that date in respect of such debentures will not be payable on presentation. Stock surrendered for conversion will be replaced by an equivalent nominal amount of the new stock in accordance with the application submited. Depentures tendered will, unless stock is requested in exchange therefor, be replaced as far as practicable by debentures in denominations corresponding to those surrendered for conversion, with the proviso, however, that stock will be issued in respect of the conversion of amounts of less than £5O or fractional portions of £5O. PREFERENCE TO CONVERSION. Preferential allotment will be given to applications for conversion. The lists for both cash and conversion applications will be opened forthwith, and will be closed on November 5. The register relating to the 4 per cent 1937-1940 stock will be closed for transfers on the evening of December 15, 1936, and the final payment of interest and the repayment of principal will be made to the registered owners of the stock on that date. Commission at the rate of 5s per £lOO stock or debentures will be allowed to jankers and registered sharebrokers on allotments made in respect of conversion acceptances and cash applications bearing their stamp. Stock will be transferable in amounts of £5 or multiples thereof. Stock and debentures of the new issues will be exempt from stamp duty on transfer otherwise than by way of gift. The register of stock will be kept at the Reserve Bank of New Zealand, Wellington. Any person of the age of 10 years or upward may be registered as the holder of stock and may execute transfers. Interest on stock or debentures will be paid free of inland exchange,