TNAG-0565-FCO40-660-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 82

G.F. 323

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currency should be revalued; (ii) favouring the currencies of those

countries with which Hong Kong has a substantial trading relationship;

and (iii) ensuring that the liabilities are denominated in the currencies

of major industrial countries which are more stable and less subject

to whimsical changes than those, for instance, of Middle Eastern

Countries.

16.

(e) Loans

4.

The currency is only one of the factors which determines the

relative attraction of a particular loan. The other important ones

include :

(1)

interest rate and expenses:

obviously these should be

minimised;

(11)

maturity: gross revenue should accrue from late 1979 and, by

the early 1980s, should be sufficient to cover all operating

costs, leaving some net revenue available to redeem loans.

However, sufficient revenue will not have been earned to

redeem all the Corporation's debts until around 1992 and,

therefore, redemption payments due before then may require

to be re-financed, incurring extra expense and the risk that

finance will not be available. The Corporation will naturally

prefer to arrange loans whose repayment will be spread over

the later years of the 1980s and early years of the 1990s;

CONFIDENTIAL

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