LOAN FINANCE

Wairarapa Times-Age, 24 May 1939, Page 7

LOAN FINANCE

COMMENT BY MASTERTON COUNTY CLERK. “During ,the year the council had occasion to raise a special loan of £14,500 for the purpose of providing its proportion of the cost of rebuilding, in reinforced concrete, eleven bridges which were in urgent need of replacement,” stated Mr J. C. D. Mackley, Masterton County Clerk in his annual report. “The borrowing of this sum was authorised by the Local Government Loans Board with interest at 3J per cent for a period of 25 years. Notwithstanding the statement made- by the Government that to support the then existing interest rate *of 3| per cent the funds of the State Advances Corporation had been increased for investing in the securities of local authorities, extreme difficulty was experienced in arranging this loan, which occasioned considerable delay in commencing the bridge reconstruction programme. The conditions under which the full amount of this loan was finally advanced by the State Advan-. ces Corporation were not entirely satisfactory. The best arrangement the council could make was for a term of 10 years repayable on the basis of a 20 year amortisation table. This means that in ten years the council will be required to raise a special redemption loan of approximately £8,500 m repayment of the original loan of £14,500. When the council put through its conversion loan it so arranged the. maturity dates in order to eliminate problems of refinancing and having put its loan finance on a proper basis it is unfortunate that it should have been required to depart from that principle.. ” ________