The National Cuts Wheat Advance Interest Rate

The National Australia Bank will reduce interest rates on all tiers of its Wheat Advance by 25 basis points from 15 October 2001.

This enhances the National's Wheat Advance product which is already the most flexible in the market, allowing growers to tailor their borrowings and control the timing of drawdowns and have the Bank underwrite the price risk on the national wheat pool.

The Bank offers growers the choice of which percentage of the pool return the grower wants to have underwritten, offering growers a range of borrowing levels with full protection. Growers can elect whether they want to borrow up to 50%, 60%, 70% or 80% of the value of their wheat based on the estimated pool return. Should the final pool return not be sufficient to repay the National's loan, the Bank will not pursue the grower for the balance.

General Manager Agribusiness Financial Services Mike Carroll said that the National's Wheat Advance has proven extremely popular with farmers.

"Our experience shows that the vast majority of farmers appreciate being able to tailor the extent of their borrowing to suit their individual circumstances," Mr Carroll said.

"The National's Wheat Advance does not lock growers into a larger loan than they need to meet their cash requirements at harvest. This product is perfect for someone who understands their cash flow and who does not want to incur the interest cost of borrowing as much as possible up front".

"This is consistent with the National's commitment to providing 'tailored financial solutions' that help customers save on their financing costs."

New Wheat Advance interest rates* (from 15 October 2001):

Underwriting Fees* (unchanged since announced on 10 September 2001):

*Interest rates and underwriting fees quoted as at 12 October 2001 and are subject to change.