N.S.W. LOAN

Hokitika Guardian, 4 October 1932, Page 5

N.S.W. LOAN

POSSIBILITIES MR BRUCE’S LIMELIGHT. (United Press Association —By Electric Telegraph—Copyright.) LONDON, October 2. Regarding the negotiotions for the Australian loan conversion, it appears to b© abnormal on the market at an abnormal time. It is almost impossible to forecast the result. One who has been in the closest touch with negotiations throughout admits: "It is impossible to foretell the result. The issue may turn out a flat failure or a. great success.” Australia is breaking new ground in coming first on the market after Britain’s gigantic loan conversion operation An opinion generally .expressed is that Australia is lucky to find this opportunity, as another British loan conversion operation is expected iyMr S. Bruce spent several hours today in seeing financial editors. He expects to go to Geneva on Wednesday. ME LYONS SATISFIED. CANBERRA, October 3, U b officially announced that the amount of .loan being converted is £12,360,000, it having been a Now South Wales Government loan, carrying : 5f per cent, interest. The yield of. the new loan to investors will be 3-| per cent. Tire average yield allows for the redemption of the loan at par in five years. The Prime Minister, Mr J. A. Lyons said that the terms were satisfactory, and the Government, naturally, | was pleased that Australia was immediately to reap benefits arising from the general fall .in interest rates on the London market. The terms, he said, were made possible by the adopting of their plan of financial reaabiUtation BIG 'INTEREST SAVING. HOPES OF N.S.W, PREMIER. SYDNEY, October 3. The N.S.W. Premier, Mr Stevens, commenting on the loan conversion, said ; “It is a wonderful price.’’ He added that four months ago, the effective rat© on these stocks at London was £8 8s per cent. “Our new rate” he said, “is thus - less than-'half; Wewill thus make an effective saving of •1J per cept. If wo secure the same rate °n our options, which we can exercise during the coming year, w p shall save, .including conversion, on® million pounds per year on our external interest bill, exclusive of the exchange costs. Putting the loan on the market at a email discount ■ should give as an early opportunity of overtaking that end establishing our stock at 34 per cent par ” LONDON, October 3. The "Financial News” says:. "T lle Australian conversion loan terms represent startling cheap borrowing for Australia in comparison with anything possible three weeks ago.’* N.Z. CENTRAL BANK. ARE BANKER,T. HOSTILE? LONDON, October 2. A Sun Service message says: City people criticise the proposal to iestablist a New Zealand Central Bank, ano consider the absence of an international monetary standard makes it inopportune. They contend that owing to the smallness of the population and the lack of an organised money market. New Zealand hag no urgent need for a central bank. It will be difficult to control exchange, and manage currency. when it is not definitely known what the currency .backing will be. Taking over the gold holdings of local banks will involve controversy, as they will not sell on tlm basis of the Bank of England’s statutory price,, when they can obtain more in the open market. STERLING EXCHANGE. RUGBY, October 1. The feature of the London foreign exchange market this morhing was the strength of sterling on New York, the rate having risen to 3.455. CONVERSION 4 PER CENT. SYDNEY, October 2. It is unofficially reported that the terms of the New South Wales conversion loan of twelve and a-half millions, will be four per cent., at a slight discount, but only a sliort term. The negotiations lasted longer than with any Australian loan for many years. Mr Bruce should have gone to Geneva on September 24, with the terms completed. Instead, h £ spent the whole of last week in man interviews. lie had revoral long telephonic conversations with Mr Lyons, the .last occurring today. One of the big difficulties during the prolonged negotiations has been the press messages from Australia, .several of these demanding more favourable terms than had even been forecasted i i the British press, which were inopportune and embarrassing. 'Mr ,Bruce had to appeal once or twice for their suppression- at this end, to prevent their appearance in the press, which might have prejudiced the negotiations.