TO BE REPAID

Timaru Herald, Volume CLVIII, Issue 23346, 1 November 1945, Page 4

TO BE REPAID

Two Loans Maturing In London £23,395,099 Involved (N.Z.P.A.) WELLINGTON, Oct. 31. “Consideration has recently been given to the action which should be taken regarding certain loans on the London market,” said the Hon. W. Nash in a statement to the House of Representatives this afterr n.

"Tn one case an amount of £12.886,110 sterling bearing interest at 5 per cent, matures on January 1 next. The possibility of converting portion of this loan and repaying the balance has received attention, but after taking all factors into account it has been decided to pay off the whole amount at maturity. “The other loan is for £10,505.989 sterling bearing interest at 4 per cent, and maturing on February 1. 1963, but in respect of which we' hold an option to repay on or after February 1, 1943, on giving three months notice. The question of dealing with this loan has been under consideration for some time, but owing to the financial restrictions on operations on the London market it has not been passible to make a conversion offer and the Government has decided to exercise. its option to repay the loan. The necessary notice Is being given in the London Gazette, and the loan will bn "epaid on February 1, next. A small portion of this 10an—£378,638.14/4 —was transferred to the New Zealand register some years ago. ana will also be subject to the repayment notice now being issued. Total Debt “The total debt domiciled in the United Kingdom is £162,112,382 sterling, and the present trail iction will reduce that figure by £23.392.099 leaving a balance of £1381720.283 of which £44,191,108 is owing to the British Government. This latter figure comprises £26,191,108 in respect of the funded debt of the 1914-18 war period and £18,000,000* under the Memorandum of Security for the present war. “The repayment of the two loans totalling £23,392.099 on January 1 and February 1 respectively will effect a saving in future years in our interest payments overseas of £1 064 545 sterling each year. These transactions while improving considerably the position of our overseas debt, do not involve the immediate liquidation of the liability, as stock will have to Le issued in New Zealand for the equivalent in Mew Zealand currency of the amount being repaid. This stock will be taken up by various Government accounts with funds available foi investment or by the Reserve Bank in exchange for the sterling funds made available for repayment purposes.” Some applause from Government members greeted Mr Nash’s announcement of repayment of the loans. Answering a question by Mi- S G Holland, Mr Nash said the question of how £18,000.000 under the Memorandum of Security should be settled was to be discussed with the British Government after the end of the war but those discussions had not vet taken place.