multi-storey car park. The issue pays an attractive eight-percent per annum on certificated bonds purchased at $2,500 each in Bermuda dollar or US dollar currency, through to the maturity date of October 20, 2010. The bonds are to be listed on the Bermuda Stock Exchange.

The 200-year-old Corporation of Hamilton financed the construction of the building by obtaining a $4 million bridging loan from the Bank of Butterfield.

The purpose of today's offering is to raise sufficient funds to discharge the corporation's obligations under the bridging loan and to meet the remaining costs of building the estimated $6,050,000 car park and to enable the City to pay for the bond issue.

It will pay for the entire scheme through the just introduced on-street parking charges and charges at the new Bull's Head facility.

The City expects income of $235,635 in the five and a half months of on-street parking to the end of this year, minus $75,652 in direct expenses. The $43,560 income from the Bull's Head facility in the two months of expected operation this year, starting November, will be offset by expenses of $15,485.

It means net income to the end of December of $188,058 that will be used to service the debt of a sinking fund and interest expenses.

The expected revenue from the two sources for all of 1996 are $692,562 minus costs of $187,412 for the on-street parking and $424,710 less $100,652 in direct expenses for the multi-storey car park. The net take that can be used to service the debt is an estimated $829,208.

The on-street parking income is based on utilisation estimates of 50 percent in 1995 and 65 percent in 1996. And for the car park, the utilisation estimates are 50 percent and 70 percent, respectively, with a parking rate of about $2.50 per vehicle, per day.

The bonds entitle the holder to an interest rate computed on a 365-day year for Bermuda dollar bonds and 360-day year for the US dollar bonds, payable half yearly March 31 and September 30 to bond holders of record ten working days before.

Although the Corporation may not redeem the bonds over the first five years, it may redeem a part or all of the bonds, subject to payment of interest to the date of redemption, at a price equal to the par value plus the redemption premium. And 30 days written notice must be given of early redemption.

Certificates will be issued within 21 days of closing.

The Corporation has created the sinking fund into which payments of $307,000 will be made annually in arrears so as to assist the Corporation in funding the repayment of its obligations to bondholders on the maturity date.

The thinking is that if the sum is annually paid into the sinking fund and earns an interest of not less than 4.75 percent, it would produce at the maturity date in 2010 the $6.5 million needed to repay the bondholders.

The prospectus advises that in the event of over-subscription of the issue, the Corporation will favour smaller investors.

Under manager Mr. Bruce Sharpe, the Capital Markets Division of the Bank of N.T. Butterfield, will perform the underwriter's services in placing the bonds and underwriting the issue.

The underwriter will seek to place the bonds with investors and will subscribe for the balance of the unsubscribed issue, up to the total of $6.5 million. An underwriting fee will be paid to the bank of 2.5 percent of the total amount subscribed.

The Bank of Butterfield Executor & Trustee Company Ltd. will be the trustee for a fee, under the Trust Deed, which is payable at the rate of $8,000 per year.

Butterfield Corporate Services Limited, the bank's subsidiary, will act as registrar, Gray & Kempe are auditors and legal advisers are Appleby, Spurling & Kempe.

The Corporation estimates that 20,000 cars pour across East Broadway every working day and the car park, together with the introduction of on-street pay parking, will greatly improve City traffic.

The $4 million bridging loan was originally repayable September 6, 1995, but was renegotiated for an extension and bears interest at 1.5 percent above the Bermuda Base Rate. The facility is subject to 1.25 percent commitment and arrangement fees on any undrawn-down balance.

Expenditure for construction-in-progress in the amount of $1,155,770 was paid from the current fund during 1994, of which $500,000 was reimbursed from the capital fund and the remaining $655,770 is included as an asset in the statement of current fund assets and liabilities as at December 31, 1994. This recoverable amount will be reimbursed by the capital fund as the loan is drawn down.

The only other outstanding long term debt is $280,000 remaining on a bank loan of $700,000 originally borrowed in 1991 to fund the extension of the City's sewer outfall off the Island's South Shore.

The City runs on about $10 million a year, providing municipal services. The main revenue comes from taxes (more than $4 million in 1994) and goods wharfage fees (nearly $3.4 million). There are 105 City employees.

Taxes on businesses and homes in the City account for some 40 percent of annual revenues. The Corporation has existing powers to charge a maximum rate of 10 percent on the annual rental value of premises in the City, without seeking Parliamentary approval. The maximum rate charged at present is 3.2 percent.

A further 35 percent of total revenue is derived from wharfage fees on all goods passing through the Corporation-owned Port of Hamilton. The remaining 25 percent is comprised of other sources of income, mainly the car parks.

GLIMPSE INTO THE FUTURE -- Architect Mr. Jon Mills' impression of what the Bull's Head three-level car park should look like when finished. It should be in operation next month.