CITY COUNCIL WILL MAKE SAVING IN INTEREST CHARGES.

Star (Christchurch), Issue 18938, 7 December 1929, Page 11

CITY COUNCIL WILL MAKE SAVING IN INTEREST CHARGES.

THREE LOANS TO BE REDEEMED NEXT YEAR.

A fairly substantial saving in interest charges will be made by the City Cuoncil as a result of the repayment next year of three Joans which tvere raised when the current rate of intei* est was 61 per cent. At the time that the council raised these loans it reserved to itself the right to pay them off either in 1930 or 1935, and the rate of interest is now well below Qh per cent, it has decided to exercise its option to pay them off next yeat. The three loans affected are the Municipal Buildings (Manchestei Street) Loan of £16.000, Linwood Public Works Loan of £7500, and £7OOO of the Sanitary Works Loan. They were raised at 6$ per * cent, and although the sinking funds are not sufficient to pay them in full, the council intends to use what money is available and to borrow the balance at 51 per cent interest. In this way it will be able to make a saving of l£ per cent interest on a total of £30,000 over a period of five years. The council is required to give notice three times in one week, six months before the date of the repayment _of the loans, in order to exercise its option to redeem them, five years earlier than the full period. This is now being done, and the Municipal Buildings Loan will be paid off on June 1, the £7OOO of the Sanitary Works Loan on July 31, and the Linwood Public Works Loan on August 1. The No. b Electricity Distribution Loan of £98,000, which was also raised at 6i per cent interest, was redeemed on September 1 last, five years earlier than the full term. In this case there has been considerable difficulty experienced in tracing some of the debenture holders. The debentures are inscribed with the holder’s name and are transferable at will, the interest being .paid on presentation of coupons every half year. The majority of the holders of debentures presented them on the date when they were redeemable, but others have had to be communicated with and requested to present them. Some have not yet been traced, and to-day there were fifteen parcels still outstanding, representing an aggregate value of £7300. Yesterday the City Treasurer found the owners of nine parcels representing £3900 worth of debentures. As there has been no interest payable on the debentures since September 1, the remaining coupons on the debentures that have not yet been redeemed are valueless.