Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Commonwealth $US225 million bond issue in USA



Download PDFDownload PDF

TREASURER

NO,, 46

EMBA1CO NOT FOR RELEASE BEFORE 9000 AM 23 NOVEMBER 1977 ,

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, MP

COMMONWEALTH $US225 MILLION BOND ISSUE IN USA

The Treasurer, Mr John Howard, announced today that

negotiations had been completed for a $US225 million

($A199=5 million) public bond issue by the Commonwealth

on the United States capital market. '

The loan consisted of two tranches: $US125 million of

8 1 /h ° / o , 7 year bonds priced at par (100 ° /o ) and $US100 million

of 8 7/8°/o, 20 year bonds priced at 98 7/8%.

Mr Howard said that a strong demand for the 7 year bonds had

enabled the Commonwealth to raise this tranche to $US125

million from the $US100 million previously indicated,,

The 7 year tranche will be repayable in full at maturity

while the 20 year tranche will be repayable in annual instal­

ments over the final 14 years of its currency to give an

average life of about 13 years.

Mr Howard said that the yields offered to investors (8o250° / o

on the 7 year and 8„997% on the 20 year bonds) were .

considered favourable in the light of present market

conditions in New York

The commissions payable for underwriting, managing and

selling the issue were 0 090°/o on the 7 year tranche and

1.25f o on the 20 year tranche and are fully competitive

with those presently prevailing in the market for foreign

issues in New York.

The loan documents were signed in New York on Tuesday by

the First Assistant Secretary of the Revenue, Loans and·

Investment Division, Department of the Treasury on behalf

of the Commonwealth0

The proceeds of the borrowing will be advanced to the States

for housing assistance and paid to the States as grants for

national road construction in 1977-780 The terms and

conditions of the borrowing were settled with the approval

of the Australian Loan Council»

CANBERRA ACT 23 November 1977