NEW ZEALAND LOAN

Waikato Times, Volume 110, Issue 18395, 31 July 1931, Page 7

NEW ZEALAND LOAN

RAISED IN LONDON. f CONSIDERED DEAR MONEY. (By Telegraph—Special to Times.) WELLINGTON, Thursday. The Minister of Finance, in his Budget address in the House of Representatives to-night, said: — To provide the necessary funds for essential public works during the current financial year, a -loan of £4,000,000 was raised in London on June 8, by means oi 5-per-cent, bearer bonds, a further £1,000,000 being added to the Issue for redemption purposes. The bonds were issued at £99, and are repayable at par on July 16, 1934. The return to investors is £5 7s 3d per cent., and the cost to the State, after allowing for expenses, amounts to £6 Is 3d per cent.\ This Is certainly dear money, but the Dominion had to go on the market in the face of complex and adverse circumstances, among which might be mentioned our heavy adverse exchanges and reactions from happenings in Australia, as evidence that the rate was by no means excessive under 'the circumstances, I may explain that the underwriters were left with approximately 6S per cent, of the loan, and that, after issue, the market price of Hie bonds fell temporarily to 97 1-8 per cent., hut later recovered to the issue price. Of the proceeds of the loan, £3,000,000 was allocated to the general Public Works Fund, out of which is met the expenditure for railway construction. telephones and telegraphs, roads, buildings, and £1.000.000 to the Electric Supply Account for carrying on I lie. hydro-electric works under construe linn.