State Begins To Sell Citizens Bonds To Vermont Residents
09/24/12 5:50PM By Steve Zind
Millions of dollars in state bonds went on sale to Vermonters Monday. The investments, which are called Citizens Bonds, are general obligation bonds available only to Vermonters. They're sold in $1,000 increments. The bonds help pay for a variety of public projects.
Steve Wisloski is deputy state treasurer. He says the state has designated at least 27 million dollars in Citizen Bonds, although more may be made available.
Wislowski says a separate, larger pool of general obligations bonds is available to any investor.
"1996 is the first Citizen Bond that I could find in our records of about $5 million,"he says. " The $27 million dollar number is about 30% to 1/3 of the amount of bonds."
Vermonters must purchase Citizens Bonds through brokers. Wisloski says it would be too costly for the state to sell them directly, without a middleman.
"It's something we've spent some time researching," he adds. "Fundamentally the answer is the administrative cost of doing a directly administered program from the state would be quite high. Going through the institutional broker-dealer market is pretty efficient for us. The mark-up on the bonds is about $3.25 on each $1,000 of bonds and that's a pretty low sales commission."The Citizens Bonds will be on sale through Wednesday. According to the treasurer's office initial orders have been strong.