LOANS CONVERSION

Auckland Star, Volume LXXIII, Issue 171, 22 July 1942, Page 6

LOANS CONVERSION

SAVING TO MOUXT EDEN

After hearing a lengthy report by the town clerk, Mr. A. D. Jack, the Mount Eden Borough Council last night decided on the motion of the Mayor, Mr. R. J. Mills, to exercise its right to convert loans totalling £120,000. e

Mr. J. J. Mrlvihill. chairman of the finance committee, said loans totalling £820,000 converted in 1934 were made subject to the Mount Eden Loan Conversion Order-in-Council which reduced the interest to 4i per cent. Under the conditions governing the loans the Mount Eden Borough Council, had, at the expiration of eight years, the right of prior redemption of loans within five years of maturity. The finance committee of the council recently reviewed the position and decided to recommend the council to redeem the existing debentures to the extent of £120.000 and re-issue new debentures at the rate of 34 per cent. The total saving to the council in interest before the expiration of the loans in 1964 would be £25.500.

"If the proposal is carried through it will mean a saving to the council of £900 per annum with yearly additional accretions of £37 10/, reaching a peak saving of £1545 in 1963," said Mr. Mulvihill. "Of course debenture holders should be given the option of reinvesting and taking up the new stock, but I am certain there is little likelihood of any being left on our hands. Such a saving as the council will make will, I feel sure, be a welcome relief to ratepayers in the difficult years ahead."

Mr. P. Skelton said it would take 22 years to liquidate the £820,000 and leave the borough unencumbered, providing no further loans were raised. Individuals had been hit by heavy war expenditure and the increased hospital levy and it would be very nice to have the borough unencumbered in 22 years. "If we can lengthen the period of repayment we can substantially reduce the rates and thus help the individual ratepayer during these trying times," added Mr. Skelton.