PM Transcripts

2 5SEP 1960
STATEMENT BY THE PRiME MINISTER, THE RT. HON.
J. G. GORTON IN THE HOUSE OF REPRESENTATIVES,
CANBERRA
19TH SEPTEMBER 1968
AUSTRALIAN LOAN IN GERMANY
The Commonwealth Treasurer, Mr McMahon, today comple~ ed
a successful round of negotiations and signed a loan agreement in
Frankfurt, Germany, with the Deutsche Bank for the issue of DM 200 million
6 million) Commonwealth securities maturing in 1974. The Deutsche
Bank will arrange for the private placement of the securities with fina ncial
institutions. The terms and conditions of the loan were settled with the
approval of the Australian Loan Council. The securities will have an
interest coupon of 6. 25 per 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 be 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 pubki loan markets in New York and London effectively closed to
Australia because of high borrowing costs, the amount tha t 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. 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 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 8 million) was arranged with the
Deutsche Bank in February last for Trans-Australia Airlines.