TNAG-0563-FCO40-658-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 235

PREMIUM BOND FINANCING

9.1

The Financial Advisers have proposed a study of premium bond financing for a variety of capital projects, including the MTR. A preliminary examination of the proposals in that study shows that the use of premium bond financing for the Mass Transit Railway would materially reduce the residual loan position by approx. 25% from $1,455M to $1,133M. This increased residual loan position has inevitably come about following the loss of the $5,000M ceiling price and the reduction in available export credits. Premium bond financing would ease this area which could become critical.

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