(b) The bonds held by HM Government were formerly a series of unsecured loan stock which was issued to the Secretary of State in 1984, each series of which was modified in 1992 to form a corresponding series of bonds, repayable at par. In July 1994, the six series maturing on or after 31 March 1997 then outstanding, with original face values of £960m, were converted into series of bonds with new face values of £1,078m and lower interest rates attaching to them. In August 1994, three bonds in the series with a total new face value of £540m were repurchased by the company from HM Government and cancelled. The premium of £75m to the original face values paid on the repurchase was charged against the profit for the year ended 31 March 1995 (note 4). The increase in the face value of £58m on the three series of bonds that were converted but not repurchased is being amortised over the lives of those bonds; at 31 March 1996, £42m (1995 – £52m) remained to be amortised.

The repayment dates, unamortised increase in face value, and the current and former interest rates attaching to the bonds held by HM Government at 31 March 1996 are as follows: