SINKING FUNDS

Sun (Auckland), Volume II, Issue 540, 18 December 1928, Page 16

SINKING FUNDS

LOAN BOARD’S ATTITUDE “SOUND BUSINESS” The requirements of the Local Government Loans Board in the provision oi* adequate sinking funds for loans was discussed by the Auckland Power Board yesterday. It was reported that a proposal to raise £ 675,000 was authorised by the Loans Board last Tuesday. Correspondence was placed before the board from the secretary of the Elec trie-Power Board's Association raising the question of whether a sinking fund of 3 per cent, which, it was said, had been adopted as a standard for supply authority loans, was not too heavy. The chairman. Mr. \V. J. Holdsworth, who is a member of the Loans Board, said there had been trouble t-aused in the past through the inadequate provision of sinking funds for loans for power boards. The Loans Board treated each case on its merits and it would foolish to attempt to force the Loans Board to modify the sinking funds being asked for at pres- ► nt. It should be realised the Loans Board was simply watching the finance of the local body concerned. which was sound business. In any case the Power Board loan had just been approved on a 2\ per cent, sinking fund basis. ‘lt seems to me the sinking fund on any loan raised should bo sufficient to liquidate the loan at maturity, quite apart front maintaining the asset purchased by the loan,” said the general manager. Mr. 11. H. Bartley, in a special report. On the motion of Mr. T. Bloodworth it was decided to express the board’s approval of the stand adopted by the | Loans Board, and to agree that it was i dvisable that each application should be considered on its merits.