BUSINESS ' I Liscipline Policy] May Save L-Park Cost >Ws in Fourneyj Hutton's Brokers Will Be Listening This Week

- K V ••• --^ 20 — MANCHESTER HERALD. Tues., March 9. 1982 Students back Bond bill amendment ianchester five] BUSINESS ' i liscipline policy] may save l-park cost >ws in fourneyj Hutton's brokers will be listening this week ... page 3 ... page 7 ... page 11 remains valid even given a spurt in rates. which currently sell at $40 each. In this case, your tax- You know that slogan — “ When E.F. Hutton talks, The idea, by the way, is somewhat similar to the zero- free capital gains would equal 25 times your original in • U people listen” ? Well, n «it week it'll be Hutton’s more J coupon corporate offerings — seven all told — that have vestment. than 4,000 brokers who will be listening as the brokerage come to the market over the last 10 months. Here, some biggie unveils a hot new moneymarket security that it SOUNDS GREAT, but if you’re the impressionable $350 million (a billion dollars in total value) was rais^, predicts will entice a billion in capital from the average Dan Doifman type, a word of caution. Municipalities, as we all know, principally from pension funds and forei^ers. A chief Rain tonight guy in the street in no time flat. are being battered by increasing financial pressures — Manchester, Conn. enticement: Neither foreigners nor pension funds pay And, if it’s that good, won’t other brokerage houses be Syndicated so there’s obvious risk. Further, any rise in Interest and Thursday taxes. rates (the danger of which is always present in this Wed., March 10, 1982 listening too? Columnist Hutton insists, however, that the idea of' selling zero- crazy economy) would immediately depress the value of — See page, 2 In brief, it’s a $5,000 municipal bond that doesn’t have 1 coupon municipals was home-bred and has been in the Singie copy 25(p any coupon. And since there isn’t any coupon, the bond -1 the bonds. Another hazard: If you need cash in a h urry, works for a year. Upralb you could be forced to sell the bonds prematurely at a will be offered at a deep discount — anywhere from 4 The initial offering of the Florida authority will be A- loss. cents to 50 cents on the dollar (the earlier the maturity, rated and is reigarded by Hutton as a safe, secure invest the costlier the bond). So for anteining up between Clearly, there are drawbacks, but Hoey hastens to ment. Nonetheless, it’ll be insured bv the brokerage roughly $250 and $2,500, you’ll be able to collect a Peter Hoey, Hutton’s national sales director of point out that municipal bonds are second only to U.S. firm because, as Hoey puts it, “ we want it to have un maturity the par amount of $5,000. municipal bonds, figures the brokerage firm will sell government securities in their record of repayment; iversal appeal.” In effect, then, the security will take on Exempt from federal taxes — and, in many cases, roughly $1 billion of these bonds over the next year (or among fixed-income instruments. Further, he believes; the rating of a Triple-A rated investment. local and state taxes as well — the zero-coupon some $3 billion in total value). if an investor is suddenly faced with the need for ready municipal bonds (as they're called) will mature Moreover he expects the Wall Street brokerage com cash, an active secondary market for zero-coupon bonds somewhere between 7 and 33 years. No commission is munity to get into the act in a big way since investors -- HOEY CHARACTERIZES the investment as a should enable them to be sold at current market value at on a nearly tax-free basis — will be able to double their required. “ guaranteed forced savings plan.” And while the Hutton the time. money in seven years ($1,700 to $5,000), just about official is obviously out selling — and hard — a couple of Hutton, it should be noted, is a roaring bull on the bond Board: Weiss violated charter triple it in 10 years ($1,700 to $5,000), make 10 times his ideas are nonethless worth thinking about. market, forecasting a 34 percent return on 20- to 30-year TH E FIRST IN A SERIES — Tampa Water & Sevyer their money in 17 years (from $5()0 to $5,(W0) and earn Example; If you need $30,000 for your child’s college bonds — that’s a combination of coupon and capital Authority — will be out in early April in a $120 million roughly 25 times on their money (from about $200 to )5,- gains — over the next year. On the other hand, it takes a , offering. Since investors will, on average, buy these tuition in 17 years, you can reach that objective by in 000) in 33 years. dim view of the equity market over the same period, es bonds at about 30 cents on the dollar, the actual cost will vesting only $4,500 in 30 zero-coupon bonds that mature Town Expert timating a total return (capital gains, plus dividends) of run around $40 million. at that time and which presently sell (once the plan The actual annual essentially tax-free returns will TH E BIG PLUSES: You far outstrip the rate of in becomes effective) at $1M each. just 7 % percent. Hoey clearly shares Hutton’s view on equities, range from about 9 '/i percent to 12 percent over the flation and you lock in the current high yields. An impor Another striking example: Let’s say you decide you remarking: “ It beats me why anybody would buy length of the instrument — with around 11 Vz percent the tant assumption is rates remain pretty much in the need $10,000 in 30 years when you retire. Simply invest same ballpark as they are today. The concept. I ’m told. $4,000 in zero-coupon bonds that mature at that point and stocks.” stops voiced average. , In brief GAA, Toyota may strike a deal sludge concern Council formed By Paul Hendrie A hydro-geologist from the Herald Reporter engineering firm of Fuss and panies relating to the manufacture of car in the U.S.,” Healy said. Co., a sister company of Toyota, met- By Michellne Maynard O’Neill casually expressed reser The Greater Manchester Chamber of Commerce small cars in the United States and they He said the Japanese automaker would with Smith in Detroit to sound out (IM on UPl Auto Writer An angry Board of Directors vations to former Highway has formed a business advisory council. agreed to talk further. Beyond this, we gain from te venture because it will the plan. Tuesday night unanimously charged Superintendent Frederick Wajcs DETROIT — General Motors Corp. have no comment,” a GM statement “ take pressure off Toyota in the area of The council, designed to respond to the needs of Japanese automakers in 1981 grabbed town General Manager Robert B. about the town’s plans to accept and Toyota Motor Co. of Japan are dis protectionism. It’s easier for them to, small business in Greater Manchester, 'will coor said. 27.7 percent of the U.S. market, their Weiss with acting in violation of the sewage ash from the Mattabassett cussing a joint venture in the United Toyota was equally brief. “ The two sell cars here if they are building them dinate its activities with those of the Mmchester largest share ever. GM led U.S. town charter. Sewer District for use at the town States that could save the No. 1 companies have committed themselves here.” Economic Development Commission. automakers with sales of 3.8 million cars. Weiss agreed today there was landfill. But the firm was never automaker financially and take political to give further consideration in the “ The possibility of profit rises The council comprises past and present local — down 7.7 percent from 1980 — while' some justification for the board’s asked for a formal recommendation heat off the top seller of imports in possibility,” said a Toyota spokesman in somewhat” for GM through the use of business executives. I Toyota’s U.S. sales of 577,000 led all. concerns, though he was displeased and never made one, according to America. Tokyo. Japanese steel and other cheaper Acting as chairman is Phillip Harrison. He is the foreign manufacturers. Despite import' by the language in the letter. Walter Fuss, a principal in the firm. former owner of Harrison’s Stationers on Main Industry sources in Tokyo said the plan technology, the analyst said. 'The “ GM is saying, 'If you can’t beat em, quotas, Toyota held even with 1980. Meanwhile, the board voted not to At an emergency meeting of the Street and is active on the Manchester Economic join em,’ ” Wall Street analyst David calls for the annual production of some automaker last year made $333 million, accept any more sludge for the town Board of Directors Tuesday night, 500,000 small-car models developed by far below its billion-dollar profits of the Development Commission, and is a former town Healy said Monday of the possible link High labor costs — now averaging landfill from the Mattabassett Mayor Stephen T. Penny said the Toyota at a now-idle GM factory. 1970s. director. between GM and Toyota. $21.50 an hour — were a top issue in Sewer District until the town has a firm had recommended against GM confirmed Chairman Roger B. Healy said the joint venture would help GM recently announced it would close Other members of the council include Charles failed negotiations between GM and the satisfactory written agreement with accepting the ash and the cut GM’s costs and put Toyota in a more a pair of plants in California, including a' Burr, owner of the former Burr Nursery ; Edgar H.

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