Manawatu Evening Standard. SATURDAY, OCT. 7, 1933. THE CONVERSION LOAN.

Manawatu Standard, Volume LIII, Issue 266, 7 October 1933, Page 6

Manawatu Evening Standard. SATURDAY, OCT. 7, 1933. THE CONVERSION LOAN.

The New Zealand conversion loan as anticipated Las met with a splendid success. Its purpose is to redeem the £5,000,000 5 per per cent. 1932-34 loan, a shortdated one raised in 1931. The new stock bears interest at the rate of 3£ per cent, and has been issued at £97. Taking redemption into account the return to investors, if they are repaid in 1949, will be £3 15s Id, and if the loan runs to its full term in 1954, £3 14s 3d. This compares more than favourably with the terms Australia received in regard to its most recent conversion, that loan yielding investors £3 17s lid on the basis of a 21 years’ period. The . short-dated loan that will be finally repaid in January next was an expensive one to New Zealand, the return to investors, including redemption over the whole period, being £5 7s 3d, and the cost to the country after allowing for expenses £6 Is 3d. London Press comment on the New Zealand transaction was generally most favourable, the terms being held to be a “just appreciation of the Dominion’s credit standing.” No doubt the Government’s resolve to make good the difference between- sterling and New Zealand currency in the Southland Power Board’s interest payments largely helped to create a receptive spirit, as shown by the fact that the loan was over-subscribed within 35 minutes of the lists being opened. The excellent financial standing this Dominion enjoys in the Metropolis must be jealously safeguarded by those whom the country entrusts in its highest offices. The success also is to be interpreted as recognition that in this great crisis New Zealand has pursued a sound path which has met with the full approval of British investors. Australia, Canada and now New Zealand have benefited from the very low rates of interest ruling in London, and there is a hint that South Africa is also seeking preferment. New Zealand has another option of £4,000,000. expiring this year, but as it is a four per cent, loan the scope for saving in interest is not large. In any case doubt has been expressed whether the Government will be able to proceed with the conversion this year. In 1935 loans amounting .to £10,000,000 reach their optional maturity dates, and in the following year £5,800,000 at 6 per cent. If as hoped the conditions in London remain as favourable as to-day New Zealand will profit when the' time comes to deal with these securities.