Colorado investors quickly snatched up a $3.99 million minibond issue sold by Denver last week to exhaust the last of the city's general obligation authorization.
"We actually had a line at some of the banks at 8 a.m. before they opened the doors," said Denver Treasurer Steve Hutt, who said the minibonds were more than $1 million oversubscribed.
Investors bought up the 12-year zero coupon bonds maturing in July 2004 with an effective yield of 6%. The bonds were sold in $1,000 denominations, so a $500 investment would give an average 8.77% taxable equivalent yield because of the double tax-exempt status of the debt.
"I think the rate was really attractive to people because of the sticker shock they have gotten this year from rates," Mr. Hutt said.
The minibond sale comes two years after the first-ever such sale for Denver. In the sale, the city sold $6 million to investors in a self-marketed program - twice what had been expected.
The sale exhausts the last of the GO bond authorization for Denver, but officials say they do not expect to go to voters soon for a new approval. Instead, city officials have said they will concentrate on operating major projects built in recent years, such as the revenue bond-financed Denver International Airport that is scheduled to open in one year.