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Deutsche Mark public bond issue



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TREASURER

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PRESS RELEASE NO. 128

EMBARGO NOT FOR RELEASE BEFORE 9.00 AM 21 OCT 1977

STATEMENT BY THE TREASURER, THE RT HON PHILLIP LYNCH, MP

DEUTSCHE MARK PUBLIC BOND ISSUE

The Treasurer, Mr Phillip Lynch, announced today that

negotiations for the Commonwealth's DM250 million ($A97 million) public bond issue arranged by the Deutsche Bank on the German

capital market had been completed,

A significant improvement in the terms originally contemplated had been negotiated and the coupon rate had been reduced from

the 6 per cent expected earlier to 5 «75 per cent.

Mr Lynch said that the terms obtained were most satisfactory.

The coupon rate of 5«75 per cent was the lowest obtained on a Commonwealth bond issue in the German market since borrowings

commenced on this market in 1967.

The issue which will reach a final maturity in 12 years

was priced at 99*25 per.cent.

After taking commissions and other expenses into account, the cost to the Commonwealth over the average life of the loan (about 10 years) was 6.21 per cent.

Mr Lynch said that the public issue was the final Deutsche Mark borrowing to be concluded within the DM1,250 million additional borrowing package announced by the Acting Treasurer

in his statement of 27 September.

The loan agreement for the issue was signed in Frankfurt yesterday, Mr Lynch said.

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The Charge d'Affaires ad interim at the Australian Embassy to the Federal Republic of Germany at Bonn - Bad Godesberg had signed on behalf of the Commonwealth.

Proceeds from the issue are expected to be received later this month. ·

CANBERRA ACT 21 October 1977