ABOUT DEBENTURES.
AN EXPERT’S ADVICE
It is important that New Zealand investors should know the tacts about debentures. There is no greater authority on this subject than Mr Hartley Withers, the leading financial expert and author in Great Britain. In his Look, "Stocks and Shares,” he says: "It is sometimes assumed that any security with the label debenture -or bond attached has a special kind ot sanctity, and may he regarded as a sound investment without furthei enquiry concerning its standing. A debenture stock or bond should he secured by a trust deed giving it a definite mortgage on the real property of the company, which should be valued at at least half as much again as the amount of debt secured on it. Thus, £300,000 of debenture stock secured by a first charge on freehold land and buildings valued at £750,000 may he considered sound if tiie valuation is fairly recent.” Mr Withers says in another part of ih,' hook that "it. is very important that thev ft lie debentures) should he clearly shown to carry a mortgage on property and assets which appear from tho valuation given in the prospectus to promise an ample margin if they should have to he realised hy the trustees for the debenture-holders, owing to a default in the payment of their interest. ' These conditions are adequately filled by the 7\ per cent Mortgage Debenture Issue of the Gisborne Sheepfarmers’ Frozen Mont Company, which is now before the public. The £300,000 issue is definitely secured hy first mortgage of property and plant valued at Cfi'ls 203. The trustee for debentureholders is the New Zealand Insurance Co., Ltd., Auckland. These facts, combined with the above statements hy Mr Witchers, will prove to intending investors that this Mortgage Debenture Tssuo is worth prompt investigation. The informative prospectus can he obtained locally from the Bank of New Zealand or any member of the Stock Exchange or from tho Company’s broker Mr W. Tussant Clayton, Gisborne, ot the Company’s office, Gisborne.
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Hokitika Guardian, 16 July 1921, Page 1
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334ABOUT DEBENTURES. Hokitika Guardian, 16 July 1921, Page 1
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