E. Greenwich to open itself up to small investors
1:32 PM Tue, Mar 24, 2009 | Permalink
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EAST GREENWICH, R.I. - With today's headlines talking about junk bonds, bad loans and Ponzi schemes, the town has decided to offer an investment opportunity to consumers that should be a lot more stable -- itself. On April 8, when East Greenwich sells $9-million worth of bond-anticipation notes and just more than $3.2 million in long-term bonds, it will, for the first time, give local residents a chance to invest in them. "We've had people say, 'Why can't we buy bonds in East Greenwich?'" said Town Manager William Sequino. Usually the bonds are bought by large private institutions. Sequino said Tuesday that the town's bond adviser has arranged with the local branch of Bank of America - and contacted area Sovereign and Webster bank branches -- to offer the bond and bond-anticipation notes in denominations of $1,000 for the notes and $5,000 for the bonds. "Normally, the average guy on the street wouldn't be able to do that," he said. The interest rate will be set on the day of the sale. With the town's Standard & Poors bond rating at AA+, the highest in the state, "We have no Ponzi schemes here," Sequino joked. The $9 million in one-year bond anticipation notes are designed to help finance the initial phase of the new middle school and other school construction projects. The $3.2 million in multi-year bonds are for making a new senior center at Swift Gym and fixing the front steps at Town Hall. Last October, the state did something similar when it sold about $25 million in tax-anticipation notes to individuals and small businesses wanting to invest in Rhode Island. One advantage for the purchases was that Rhode Island residents do not have to pay state or federal income tax on the interest earned. The same will be true for the town notes, Sequino said. gemery@projo.com / 401-277-7442 
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