HALF MILLION LOAN.

Gisborne Times, Volume V, Issue 79, 10 April 1901, Page 2

HALF MILLION LOAN.

From our advertising columns parti culars may be obtained of the step that are being taken in regard to tin proposed half million loan. A Wol lington correspondent points out tha as the first interest coupon will bi payable on Ist October next, it will b< for a sum equal to six months’ interes on the nominal amount of the deben ture. This amounts to a substantia concession, as the holder of a £10( debenture would be entitled to receive £2 in interest on that date, even al though the full amount of the debenture is not paid until the 4th June. A further concession by way of discoun! at the rate of one and a half per cent per annum is offered for prepayment of the second instalment of fifty per cent. Tenders are expected from Melbourne and Sydney, and the Bank of New Zealand is authorised to accept payment at those places. This is the third local loan issued, and the second offered by the present Government. As far back as 1873 an attempt was made to float £250,000 in four per cent, debentures, but it was a failure, only £40,000 being offered, and of this £IO,OOO was at 89£ percent., and only £3OO was accepted. The present Government was more fortunate. In 1896 it issued half a million of 3f r per cent, debentures, and £508,000 was offered, the average price being over par, and there were ten tenders, the principal tenders being the Bank of New Zealand and the Bank of New South Wales, the former taking the bulk of the issue. The rate of interest on tli9 new loan being one per cent, more than that paid by the Savings Bank, it is likely to attract investors. The Wellington Times points out in a semiinspired article that the cost of raising the loan here is practically nil, while the cost in London would be quite 2 per cent. This difference reduces the interest from '4 to 3j, The price in the present state of the London market would be much less than par, while the issue of a 4< per cent, loan in the colony on a 3£ per cent, basis is regarded as good ‘ finance. The financial authorities predict satisfactory results from the experiment of borrowing locally as justifying the cautious and yet bold policy of the Government.