(2) The holder of any existing securities bearing interest at a rate which, as reduced
in accordance with Part I of the Act, exceeds the rate of interest payable on the new
securities shall on the conversion of such securities be entitled to receive new securities
for the same aggregate amount of principal as is secured by the existing securities,
and, in addition thereto, shall be entitled to receive a premium on such principal
computed in accordance with the Fourth Schedule hereto.

18. (1) Subject to the provisions of this clause as to payment in cash, every
    premium to which any person is entitled under the last preceding clause shall be satisfied
    by issuing to him additional new securities for the amount of such premium, or so much
    thereof as is not paid in cash, as the case may be.

(2) The local authority shall pay in cash the amount (if any) required to reduce to
the nearest multiple of five pounds the aggregate amount of all such premiums to
which any person is entitled, and may, if it thinks fit, pay in cash the whole or any part
of the balance of any such aggregate amount.

(3) All payments of cash in accordance with the last preceding subclause shall be
made by the local authority out of the local fund or out of loan-moneys raised pursuant
to the next succeeding clause.

(4) The power of the local authority to issue new securities in accordance with
this Order shall be deemed to include the power to issue any additional new securities
required for the purposes of this clause.

19. (1) For the purpose of providing for cash premium payments the local
    authority may create, issue, and sell at par new securities for an aggregate amount not
    exceeding seven thousand six hundred and forty pounds, bearing interest at a rate not
    exceeding four and one-quarter per centum per annum, and redeemable at par on or
    before the first day of February, one thousand nine hundred and thirty-six.

(2) Pending the raising of the moneys by the sale of any such new securities the
local authority may borrow the said sum of seven thousand six hundred and forty pounds,
or any part thereof, by the hypothecation of such new securities at a rate of interest
not exceeding five per centum per annum.

PLACE FOR PAYMENT OF PRINCIPAL AND INTEREST.

20. The principal and interest in respect of new securities shall be payable in New
    Zealand.

CONSOLIDATED SINKING FUND FOR NEW SECURITIES.

21. (1) In order to provide funds for the repayment of the new securities the local
    authority shall forthwith make provision for the creation, pursuant to a resolution of
    the local authority, of a consolidated sinking fund, of which the Public Trustee shall be
    the Commissioner.

(2) For such purpose the local authority shall permanently appropriate and shall
pay to the Commissioner of the consolidated sinking fund on the first day of February,
one thousand nine hundred and thirty-five, and on each first day of August and first
day of February thereafter up to and including the first day of February, one thousand
nine hundred and sixty-one, a contribution of two thousand four hundred and ninety
pounds, increased in respect of each contribution by a sum equal to two and one-eighth
per centum of the aggregate amount of new securities redeemable at any time prior to
the date on which such contribution is payable, and reduced by the aggregate of the
sums which during the six months preceding the date of payment of such contribution
have, pursuant to the provisions of the next succeeding clause, been paid to any sinking
funds for unconverted securities. The proviso to subsection three of section twenty
of the Electric-power Boards Amendment Act, 1927, shall not apply to any such part
of the contribution as exceeds two thousand four hundred and ninety pounds.

(3) The provisions of subsection four, five, and six of section ninety-five of the
Local Bodies' Loans Act, 1926, shall apply with respect to such sinking fund.

SINKING FUND FOR UNCONVERTED SECURITIES.

22. (1) If dissent is signified in accordance with the provisions of this Order from
    the conversion of any existing securities issued in respect of any loan referred to in the
    First Schedule hereto for which a sinking fund was provided, the local authority, in
    order to provide funds for the repayment of the unconverted securities issued in respect
    of such loan, shall forthwith make provision for the creation, pursuant to a resolution
    of the local authority, of a sinking fund, of which the persons who at the date of con-
    version were Sinking Fund Commissioners in respect of such loan shall be the first
    Commissioners.

(2) For such purpose the local authority shall permanently appropriate a sum which
bears the same proportion to the annual contribution payable, before the date of
conversion, to the existing sinking fund of such loan as the aggregate amount of
principal secured by such unconverted securities bears to the aggregate amount of
principal secured by all the existing securities in respect of which such existing sinking
fund is held, and shall pay such sum to the Commissioners yearly and every year until
the maturity date of such unconverted securities, or until the Commissioners are
satisfied that the accumulations of sinking fund will suffice to redeem such securities at
maturity.

(3) The first of such yearly payments shall be made not later than one year after
the date on which the last annual contribution payable before the date of conversion
to the existing sinking fund of such loan was payable.

(4) Subject to the provisions of this Order, the provisions of sections forty to
forty-four of the Local Bodies' Loans Act, 1926, shall, so far as applicable and with
all necessary modifications, apply with respect to such sinking fund:

Provided that nothing in the said sections or in this Order shall authorize the
removal or suspension of the Public Trustee as Commissioner of any sinking fund.

APPLICATION OF EXISTING SINKING FUNDS.

23. Where the whole of the existing securities issued in respect of any loan specified
    in the first column of the First Schedule hereto and outstanding at the date of conversion
    are not existing securities to which the Act applies, the existing sinking fund of such
    loan shall be divided into two parts, the first of which shall bear to the second the
    same proportion which the amount of the outstanding existing securities to which the Act
    applies bears to the amount of the outstanding existing securities to which the Act
    does not apply. The first part of such sinking fund shall be applied by the Commissioners
    thereof in accordance with the provisions of clause twenty-six hereof as if those existing
    securities issued in respect of the loan to which the Act applies were a separate loan
    to which that clause applies, and such first part of the sinking fund were the sinking
    fund of such separate loan, and the second part of such sinking fund shall be retained
    by the Commissioners as a sinking fund for those existing securities issued in respect of
    the loan to which the Act does not apply.

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