A $50 million Government bond issue is aimed at small Bermuda investors, Finance Minister Bob Richards told a meeting last night.

Mr Richards said the $10,000 minimum investment in the issue was geared to personal purchases — not institutional buyers.

He added: “Insofar as the minimum amount is concerned, this is a trade-off between the minimum amount and the work and administration it takes to process applications.”

He was speaking at the first meeting to publicise the issue, held at the Fairmont Hamilton Princess, after a member of the audience asked why the minimum could not have been set at $5,000.

Mr Richards pointed out that it took the same amount of time and administration to process a $1,000 subscription as it did for a $100,000 one.

He added that the overseas US dollar bond issue — amounting to $750 million — had been set with a $200,000 minimum.

Mr Richards said: “We didn’t think that was appropriate for the Bermuda market because we would only get very wealthy people or institutions and it was not our intention to do that.”

In response to another question from the floor, he said the short time period to make a subscription, which ends on Friday evening, was “also pretty standard”.

Mr Richards said: “There is a lot of information to be taken in, but we don’t want the deadline to drag on. There should be plenty of time between now and the close to get your questions answered.”

Mr Richards added that the overseas issue had been three times oversubscribed.

He said: “We would certainly love to have oversubscriptions — the issue is for $50 million and if we have subscriptions of $60 million, then people will not get their subscriptions.”

And he added: “We don’t want big investors to crowd out smaller investors. We have made this very clear. The small investors will get their subscriptions filled first then we will go to through the larger ones.

“If we get enough $10,000 subscriptions to get $50 million, if you put in a $100,000 subscription, you won’t get anything. Our objective is to put these bonds in the hands of the man in the street.”

The issue, together with the $750 million overseas in overseas bonds, is designed to help Government make up the predicted Budget shortfall over the next three years.

Curtis Dickinson, in charge of the issue for bookrunner Butterfield Securities, said: “The Government indicated a plan to raise $800 million to fund future deficits.

“They took a decision to raise the remaining funds in Bermuda and give Bermudians a chance to take up the offer.”

He added: “It’s important and an important signal to local investors that their Government is making its debt, which wasn’t available to them, before — available to them.

“The country is looking to raise money and it’s logical that it should look to its own populace.”

Another public session to discuss the issue will be held at the Hamilton Princess tonight, starting at 5.30pm. Applications for the issue are open to Bermuda residents “subject to the laws of any applicable jurisdiction and persons with Bermudian status who may be permitted without further action by the Government and under the laws of their respective jurisdiction of residence to subscribe for securities of this nature”.

The interest rate will be dependent on market demand, but will be at least 4.75 percent and, over the $10,0000 minimum, investors can go up in $1,000 segments.

Butterfield will accept subscription applications from permitted purchasers until 5pm on Friday.

Subscription applications are available at www.butterfieldgroup.com/govbond2013.

Alternatively, e-mail govbond2013@butterfieldgroup.com or through personal application at the firm’s offices at 65 Front Street, or via a broker.

The bonds are expected to be rated at AA-, negative outlook by Standard & Poors and at Aa3, negative outlook by Moody’s, while Fitch is expected to give an AA-, negative outlook rating as well.