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Australian loan in Germany



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STATEMENT. BY,.THE . PR.IME. MINISTER AND CHAIRMAN OF. THE AUSTRALIAN. LOAN COUNCIL . . THE RT. HON.. J. G. GORTON M.P .

AUSTRALIAN LOAN IN. GERMANY :.

The Commonwealth. Treasurer, Mr. McMahon, today

completed: a.' successful. round. of .negotiations and:.signed a

loan .agreement , in. Frankfurt,..Germany,.with the-_Deutsche Bank

for the ,issue_.of,DM 200 million ($44.6 million) Commonwealth

securities maturing 'in 1974. The ,Deutsche..Bank will arrange:.

for the private placement of-the securities with financial

institutions.

The terms .and.conditions of'the . loan...weresettled

with .the.approval 'of the.Australian Loan._.,.Coun .cil.. The

securities will have.an.interest coupon of•'6.25 pe'r' .cent, and

will be, issued at 99.5 per cent.to.give a yield. to maturity

of . 6.35 per. cent. . The, net .proceeds . of . the.. loan will be paid

to.the Commonwealth. on 30 September. The foreign currency

proceeds will be added to,Australia's international. reserves

and the Australian currency equivalent will b.e.applied-to the

Commonwealth Government's share.of the 1968-69 works and

housing-programme approved by the.Australian Loan Council.

The Commonwealth.has not.previously borrowed for

works and housing programmes for periods of less than ten

years. However, with the public loan markets in New York

and London effectively closed to Australia because of, high

borrowing costs, the amount that could be.obtained through

long term loans is limited and advantage has been taken of

the availability,of medium-term finance in Europe. This will

add usefully to .our oversea loan raisings this year.

Co 2.

•1 The Government regards this as a highly successful

outcome which reflects great credit_ on Australia's status

as .a borrower in the..European market.

The . Commonwealth has previously raised two public

loans in Germany, each for DM 100 million ($22.3 million),

in October 1967 and July 1968, through underwriting syndicates

led by the Deutsche Bank.. In addition a loan of. DM 16.8

million . ($3..8 million) was arranged. with the Deutsche .Bank

in February last for Trans-Australia Airlines..

CANBERRA. . A. C.. T,. 19 September 1968.