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Commonwealth DFL 300 million direct bank loan in the Netherlands



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NO. 85

TREASURER

EMBARGO NOT FOR RELEASE BEFORE 5.00PM 25 AUG 1978

RELEASEy J

STATEMENT BY THE TREASURER, THE HON JOHN HOWARD, M.P.

COMMONWEALTH DFL 300 MILLION DIRECT BANK LOAN IN THE NETHERLANDS

The Treasurer, Mr John Howard, today announced that negotiations for a DF1 300

million ($A121 million) direct bank borrowing by the Commonwealth in the Netherlands

were completed with the signing of loan documentation in Canberra today.

The borrowing, which was arranged with Algemene Bank Nederland N.V., carries an

interest rate of 8.25 per cent per annum.. It is for a term of fifteen years and

will be repaid in fifteen equal annual instalments commencing August 1979ยท

Mr Howard said that the interest rate payable on the loan was higher than the

7.625 per cent rate applying to the Commonwealth's previous loan in the

Netherlands in May this year.

This was a reflection of both the 5 year longer period to final maturity of the

present loan and a modest upward movement in interest rates in the Dutch capital

market over recent months.

After taking fees and other expenses payable into account, the cost of funds to the

Commonwealth for the latest loan was 8.28 per cent per annum to final maturity.

Mr Howard said that he regarded the terms as most satisfactory for the Commonwealth.

Proceeds of the borrowing, which will be received at the end of the month, will be

provided as grants to the States for road construction and maintenance. The terms

and conditions of the borrowing were settled with the approval of the Loan Council.

CANBERRA ACT 25 Aug 1978