TOWN OF WILTON SELLS $3.24 MILLION IN GENERAL OBLIGATION BONDS

WILTON, CONN.
The town of Wilton received some welcome news on June 27 when it received a particularly attractive bid of 3.898 percent from Roosevelt & Cross, Inc., on the $3.24 million in general obligation bonds the town had offered.

Proceeds of the sale will be used to permanently finance a portion of the bond anticipation notes issued July 18, 2001, and maturing July 17, 2002, as well as to provide funding for school projects, park improvements and emergency communication system improvements.

"This was an extremely favorable bid and is a reflection, not only of the current interest rate environment, but also of the creditworthiness of the town," said Kathleen Morrissey, officer, Municipal Banking and Finance at People's. The Connecticut-based bank acted as the town's adviser on the sale.

"This is a good time to issue debt," Morrissey added. "We were encouraged a week before this sale when the Federal Open Market Committee left the federal funds rate at 1.75 percent. That decision means the prime lending rate will probably stay at its current level of 4.75 percent, and that's great news for borrowers." According to Morrissey, the prime rate has not been at that rate since November 1965.

Cities and towns fund major projects with municipal bonds and notes, which are auctioned to institutional investors who then place bids on the government debt obligations. Unlike an auction of art work or antiques, where the high bidder wins, the winner in a municipal auction is the firm placing the lowest bid.

"The lower the bid, the less the total interest cost to the municipality and to its residents, explained Morrissey. "We also advise the government officials to consider other factors, such as premiums offered and coupon rate." The coupon rate is the periodic interest payment the individual investor will receive after purchasing the obligations.

People's has been an innovator in municipal finance. In 1999, People's became the first Connecticut bank to use the Internet to auction municipal bonds and notes, and is one of a select few using that technology today. Morrissey said using Web-based technology can mean more bidders and lower rates, saving money for the governmental agency. People's also was the first Connecticut bank to use the Internet and e-mail to distribute official statements, the disclosure documents issued before these auctions.

People's (peoples.com) is a diversified financial services company providing commercial, consumer, insurance and investment services. Founded in 1842, it is the largest state-chartered bank in Connecticut with managed assets of $13 billion, 150 branches and 230 ATMs. People's is a leader in consumer and commercial banking, residential lending, insurance sales, supermarket banking and is the nation's 15th-largest issuer of MasterCard and Visa credit cards. People's subsidiaries offer brokerage services, asset management, equipment financing and leasing, and insurance services.