June 30,1998

Note 24

SUBSEQUENT EVENTS

In July, $185.4 million of general obligation bonds were issued. $105.4 million were issued for the purpose of advance refunding and will mature at various dates through 2008, and bearing interest rates of 5.65% to 6.14%.

Also, $80 million which were originally issued in 1996 with variable interest rates were converted to fixed rates. These bonds mature at various dates though 2006 and bear interest rates of 5.65% to 6.12%.

In September, $225 million of special tax obligation bonds for transportation infrastructure programs were issued. These bonds mature on various dates though 2018 and bear interest rates of 4.0% to 5.5%.

In October, $230 million of general obligation bonds were issued, maturing at various dates through 2018 and having interest rates of 3.40% to 5.25%.

In December, the Treasurer determined that two nursing homes which were in receivership and had defaulted on their loan payments to the Connecticut Health and Educational Facilities Authority (CHEFA) were not likely to generate sufficient revenue to make scheduled principal and interest payments on $59.2 million of CHEFA's outstanding revenue bonds. Since these bonds are secured by special capital reserve funds, the Treasurer has made a determination to treat the State's obligation to fund the special capital reserve funds over the term of the Bonds as debt for purposes of calculating the debt limit of the State. As a result, the obligation to pay debt service on such Bonds is reclassified as a direct long term debt obligation of the State in fiscal year 1999. The State intends to defease the Bonds from amounts reserved for debt retirement from the June 30, 1998 unappropriated surplus.

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