MORTGAGE CORPORATION

Wanganui Chronicle, Volume 79, Issue 200, 27 August 1935, Page 11

MORTGAGE CORPORATION

ISSUE OF DEBENTURES £500,000 at 3 3-8% A FIRST CLASS TRUSTEE SECURITY. The Mortgage Corporation of New Zealand is offering at par an issue of £500,000 series A debentures or stock with interest at 3 3-8 per cent, payable half-yearly. The debentures, with interest coupons attached, are in denominations of £2O, £4O, £.IOO, £SOO and £IOOO, or any such higher denominations as may be agreed upon at the time of issue. Debentures arc exchangeable for stork of the Mortgage Corporation if required, while stock will be issued for any amount of £4O or more in multiples of £2O, and may be exchanged for de luntures. The Mortgage Corporation of New Zealand was established aq a, financial institution of national character under a special Act of Parliament and will prove a material factor in the establishment of a sound basis of mortgage finance in the Dominion. The Corporation has been established in order to grant loans on first mortgage security and land, in accordance with special legislation. Its immediate assets consist of mortgages previously vested in the State Advances Superintendent and on which the Corporation is wholly safeguarded against loss by Statute. An immediate reserve fund has been established by the Government amounting to £2,750,000 in local body securities. The confidence of investors in this issue of debentures and stock should be assured by the limit imposed by Statute on the borrowing powers of the Corporation, and on the margin of security for loans and by the statutory requirements governing the establishment and maintenance of a substantial re serve fund on sound lines. This par ticular issue should appeal to investors ,

generally and to trustees, as being a tiustee investment authorised by Statute and by reason of: (1) The debentures giving to the holder a float ing charge over a large number of mortgages, instead of the security of a single mortgage; (2) the easy negotiability of the securities; (3) an ample safety margin which becomes greater as the operations of the Corporation increase; (4) no difficulty in collecting in terest; (5) the opport unity of acquiring a trustee investment without having to pay a premium. The Mortgage Corpora tion opens up a new era of mortgage finance in the Dominion, by linking long-term mortgages to securities (de benture or stock) easily marketable on the stock exchange. The principle of the Mortgage Corporation is not new, in fact, the mortgage bond system has been operating in several other coun tries for many years (in Germany for 150 years), the two outstanding features being financing by means of bond issues and repayments on the amortised system. Several countries in Europe employ this method of finance and the bonds are bought in Europe as readily as Government issues and largely on the same terms as regards interest. This issue of debenture and stock of the Mortgage Corporation offers the type of investment desired by the conservative anil the prudent, and at a satisfactory rate of interest. It is confidently anticipated that the piesent issue of £500,000 debentures will be over-subscribed in a very short period and early application is advised. The list of applications will close on or about September 10, 1935. Prospectus and application forms are obtainable from a branch of any bank, Postal Money Order Office, or member of any Stock Exchange, or head office and branches of the Corporation.