NEW FIVE MILLION LOAN.

Timaru Herald, Volume CXXV, Issue 17947, 4 May 1928, Page 11

NEW FIVE MILLION LOAN.

OVERSUBSCRIBED AT REDUCED RATE. ANNOUNCED BY MINISTER. T«l«cr»i)h—Praia Association. WELLINGTON, May 3. The Honr W. Downie Stewart, Minister of Finance, stated to-day that the .Liondon loan to provide the additional capital required tor carrying "on the Public Works programme is for the amount of £5,000,000, bearing interest at 4J per cent, with an issue price of £9i 10s per cent. Including the redemption of discount over tne period ol ; tne loan, this will give a return to investors of about £4 19s 8d per cent., as compared wth £6 Os lOd from last year’s loan, which was 5 per cent, at £99 10s. This issue at 4$ per cent, is a definite break from the 5 per cent, rate which has obtained in London for some time, and indicates a distinct tendency towards easier conditions.

Combined with the issue fox - new moixey, said the Minister, there is an oiler to holders of our 4 per cent, coliso’idated stock, £29,000,000 of which matures in 1929, to convert their holdings, up to a limit of £5,000,000 in the aggregate, into 4i per cent stock at i the rate of £lo4£ of new stock for £IOO of old. This is equivalent to an issue price of about £95 14s for the . new scofck, giving a return to investors, with redemption of discount over the period, of £4 16s lOd per cent. The terms are regarded as satisfactory, in view of the ruling rates of interest, especially when it xs borne in mind that the market will have to bear such heavy calls. In dealing with our 4 per cent, maturity stock, the policy of offering portions of the £29,000,000 before maturity, while costing some additional interest for twelve months, should have the result of placing the whole stock on a more favourable basis than if left to be attempted m one sum at maturity date. *Mr Stewart concluded: Ilmve just been advised that the £5,000,000 cash loan which was issued in London yesterday was over-subscribed, and tne lists closed at 11 o’clock. The success, of this 14 per cent, issue will not only benefit us directly, but gives good colour to authoritative statements recently made that Britj*h finain*. and moving towards improved conditions.” *