6
Weller St Elbr
/
+5
Mr. Ellis.
When you speak of repayment in 5 years, I
presume you have in mind a clause similar to clause 4
of the War Loan Ordinance, 1916, enabling the Governor
to redeem at any time after 5 years,
If we issued 5-year bonds for Hong Kong
here, say 5 per cent Bonds at 99, the "expenses" of
underwriting etc., would bring the net proceeds below
97, and the effective annual cost to the Government
would approximate to 5 per cent. To this must be
added any risks of fall in the Hong Kong exchange
I though of course if the exchange should happen to
be higher at the time of redemption there would be
a profit instead of a loss in this respect).
For the reasons you give I entirely agree
that it would be better to let the Governor raise the
loan locally as he proposes, even at 6 per cent.
locally
? ceply
as
GAAR
im deb herewith
um my G.G. 6.7.77
7.7.27
69707-20