AT A PREMIUM

Wairarapa Times-Age, 10 August 1939, Page 7

AT A PREMIUM

DEALINGS IN NEW ZEALAND LOAN CONVERSION OPERATION. OVER HALF OF ISSUE REPORTED LEFT WITH BANKS. (Independent Cable Service.) LONDON. August 9. Dealings in the Few Zealand loan began on the Stock Exchange at a premium of 2s (id. (’out ra ry to genera I procedure, the result of Ihe issue was not ofiieially announced and the market is left guessing how iniieli of Ihe loan is taken up by cash and conversion a ppi ieat ions. It is believed that the Bank of England and the "Big Five” banks, which underwrote the issue, have been left with over half of the loan. UNUSUAL GUARANTEED BY BAN’KS. By Telegraph—Press Association—Copyright. LONDON, August 9. Because of an unusual method of guarantee, interest is centring in the New Zealand loan, in which dealings are expected to begin today at about par. The issue was not underwritten in the usual way. The Bank of England called on the banks to guarantee to a maximum of £6.000,000 any part of the loan not covered by the conversions or cash applications. The Bank of England itself guaranteed the. balance of £10,000,000 without commission. The banks are unlikely to disclose how much stock they will take up. It is anticipated that a fair amount of maturing stock will be converted, but it is thought unlikely that the public subscriptions will be large. It is understood . the clearing banks converted their holdings in the existing loan, but all discount houses have not been willing to convert, chiefly because of a possible difficulty in obtaining call money loans against the new loan. The London funds of the New Zealand banks are so low that they are not in a position to advance substantial amounts at call, while the London clearing banks are not anxious to accept the new loan as collateral for day-to-day loans.