The State of Rhode Island will be issuing $350 million dollars in tax anticipation notes to help meet expenses.  The State has issued similar notes in the past, but in a twist, General Treasurer Frank Caprio is offering citizens an opportunity to purchase the notes in increments as low as $1,000.  The notes will be offered at Bank of America locations and will have a yield of 3%.

     Governor Carcieri states that Rhode Island isn't looking for residents to "bail out the state", and insists that institutions will still be interested in purchasing the notes, which were given an F1+ rating by Fitch, which is its highest rating.  I agree with the Governor's view that institutional investors will be interested in these notes, but I also supprt Caprio's idea to sell the notes to retail investors. 

     The State has set aside $105 million worth of notes for retail investors, and mentions that a similar sale in California resulted in 75% of the notes being sold to retail investors.  Offering Rhode Islanders a chance to purchase the notes is a good idea, but I doubt all $105 million will be purchased.  At any rate, it gives Rhode Islanders a safe investment choice, and a chance to help their state.


http://www.projo.com/news/content/RHODE_ISLAND_ECONOMY_10-25-08_1NC26D6_v16.3b94823.html