24/36
- 2 -
as we should then be able to arrange for it to be taken
up for a number of Sinking Funds which we anticipate will mature about that date.
239
4. In saying this we assume that there will be no necessity for the arrangement or a similar currency for the "direct loan" of about £230,000 for British Honduras which has also been proposed see your letter of the 27th. April
CA last, No. 0.4324/26 and previous correspondence since it
-
-
will be difficult for us to find sufficient money from suitable sinking funds to provide as much as £580,000 for repayment in the same year.
5. As you are aware from the 4th. paragraph of our latter of the 22nd. February last, we consider that when a loan is issued as a "direct loan", the specific loan Ordinance should provide for sinking fund contributions adequate to redeem it at maturity. In the present case, with a currency of 13 years, and calculating the rate of accumulation at 4 per cent per annum, the annual contribution! required would be at the rate of £5.16.10. per cent. Adding 5 per cent for interest and assuming a net price of
98 as estimated below, the annual charge to the Colony for interest and sinking fund would be £38,820.
6. With regard to the size of the loan, we have to enquire whether we may assume that the Secretary of State
is satisfied that the amount of the Hong Kong loan which it is proposed to raise, viz. £350,000, is not too large to
be dealt with under the direct loan scheme. We have raised
the same question in regard to the somewhat smaller loan (£230,000) proposed for British Honduras, but we have not
yet received a reply on the point.
7. As regards the security of the loan we snall be
glad to have an assurance that the Secretary of State is
satisfied that it would be a proper one for the investment
of money belonging to other Colonial Governments under
"direct/
No comments yet.
Private notes are available after approval.