New Zealand Gazette – 1934 – No. 94

Page 4312

✨ Loan Conversion Details



FOURTH SCHEDULE.

COMPUTATION OF PREMIUMS.

  1. THE amount of the premium payable on the conversion of any existing securities
    shall be equal to the product obtained by multiplying the following factors, namely:—

(a) The difference between one year's interest on the amount of principal secured
by the existing securities at the rate payable thereon immediately before
the date of conversion and one year's interest on the same amount at the rate
payable on the new securities; and

(b) The appropriate factor specified in the Table of Factors hereinafter set out,
according to the period between the date of conversion and the maturity
date of the existing securities.

  1. For the purpose of computing any such period as is mentioned in paragraph
    (b) of the last preceding clause, any fraction of a half-year that is not less than three
    months shall be counted as a half-year, and any such fraction that is less than three
    months shall not be taken into account.

Table of Factors.

Period from Date of Period from Date of
Conversion to Maturity Conversion to Maturity
Date of Existing Date of Existing
Securities. Securities.
Factor. Factor.
Years. Years.
$\frac{1}{2}$ 0·488998
1 0·967235
1½ 1·434948
2 1·892370
2½ 2·339726
3 2·777238
3½ 3·205123
4 3·623592
4½ 4·032853
5 4·433108
5½ 4·824556
6 5·207389
6½ 5·581799
7 5·947970
7½ 6·306083
8 6·656316
8½ 6·998842
9 7·333831
9½ 7·661448
10 7·981856
10½ 8·295214
11 8·601676
11½ 8·901395
12 9·194518
12½ 9·481191
13 9·761556
13½ 10·035752
14 10·303914
14½ 10·566175
15 10·822665
15½ 11·073511
16 11·318837
16½ 11·558765
17 11·793413
17½ 12·022898
18 12·247333
18½ 12·466829
19 12·681496

Example of Working.

Conversion as from 15th December, 1933, of 6 per cent. securities for £100, maturing
14th January, 1947, into 4½ per cent. securities.

Interest rate on existing securities (as reduced by Part I of the Act) is 4⅔ per
cent. per annum.

One year's interest on £100 at existing rate (4⅔ per cent.) is ... ... 4·8
One year's interest on £100 at new rate (4½ per cent.) is ... ... 4·25

Difference is ... ... ... ... ... £0·55

Period from date of conversion (15th December, 1933) to existing maturity date
(14th January, 1947) is 13 years 30 days, counted as 13 years.

Factor for 13 years is 9·761556.

£0·55 multiplied by 9·761556 is £5·3688558, or £5 7s. 4d., which is the premium
for £100 of the existing securities.

The premiums on other amounts of existing securities of the same class can be
computed in the same way, or alternatively, by ascertaining 5·3688558 per cent. of the
amount of the principal in each case.

A. W. MULLIGAN,
Acting Clerk of the Executive Council.

(T. 49/188/1.)



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✨ LLM interpretation of page content

💰 Tararua Electric-power Board Loans Conversion Order, 1934 (continued from previous page)

💰 Finance & Revenue
14 December 1934
Loan conversion, Local authority, Tararua Electric-power Board, Order in Council, Securities, Debentures, Interest rates, Maturity dates
  • A. W. Mulligan, Acting Clerk of the Executive Council