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 NEW YORK, April 8 /PRNewswire/ -- The City of Las Vegas, Nevada,

completed an offering on April 1, 1992 of $67,295,000 General Obligation Sewer Improvement and Refunding Bonds, containing an innovative new financing structure, it was announced today. The new product, Detachable Call Options, was developed by the sole managing underwriter of the transaction, PaineWebber Incorporated. This structure is a first in the municipal market and opens an significant new area for municipal fiance. The issue was priced on Tuesday and was received favorably by the institutional market.
 The new issue is first callable by the city in ten years but is structured so that the city may choose to sell its call option rights if the need arises for refunding the issue. The main advantage of this structure for municipal issuers is that, instead of going through the long and often expensive process of redeeming a bond issue in the event of lower prevailing interest rates, the issuer may generate income by simply electing to sell the call options. Even though a market for these call options does not yet exist, the City of Las Vegas believes that it has increased its future refinancing flexibility. William J. Noonan, Las Vegas' city manager, was pleased with the market's acceptance of the issue. "This provision offers a much more efficient way for the city to refinance in the future. Costs on advance refundings run us about 20 percent of our savings level. We are excited about what this could save municipal issuers around the country."
 While the city does not have the legal ability to offer the call options, it will be looking for authorization from the Nevada State legislature in a future session. The city's mayor, Jan Laverty Jones, was proud to be a part of the first offering of the instrument. "We had some very innovative people working for the city on this financing. Our finance department and Paul Howarth, our financial advisor, saw the benefits of this transaction and both myself and the City Council wholeheartedly approved of their efforts to bring this product to the market."
 Paul B. Guenther, PaineWebber's president, stated that this new product is part of the firm's ongoing commitment to market-changing innovations which will benefit its clients. "We have increased our focus on new and derivative products in the municipal area. The capital needs of our municipal clients are growing, and by focusing on innovations, we are helping clients meet specific needs."
 The structure of this new issue is not very different from a regular issue. The right to call the bonds is separated from the now-required redemption and the issuer is allowed to assign, sell or otherwise transfer to a third party its right to call the bonds. The terms under which an investor buys the bonds are unchanged. The Las Vegas issue was structured with a standard first call date of 10 years, at a call price of 102 percent of par. The call date, price and premium do not change. The new provision simply allows the issuer to sell its legal right to call the bonds
 Jeffrey D. Holt, the developer of the concept for PaineWebber, believes that issuers and investors both benefit from this new structure. "If an issuer can directly extract value from the sale of the call provision, the issuer will no longer need to use the less efficient advance refunding structure to get savings. At the same time, investors may have an opportunity to convert their 10-year callable bond into a non-callable bond by buying the call provision, if and when offered, at some point in the future."
 Holt went on to add that the biggest application for Detachable Call Options is for airports, pollution control agencies and other private activity issuers that cannot now utilize advance refundings because of restrictions in the federal tax code, which cause them to resort to structuring deals that can cost them upwards of 100 basis points over current market yields.
 PaineWebber Incorporated is one of the nation's leading full-service securities firms, serving the investment and capital needs of a worldwide client base.
 -0- 4/8/92
 /CONTACT: Beverly T. Spano of PaineWebber, 201-902-6775, or Jeffrey Z. Taufield of Kekst and Company, 212-593-2655, for PaineWebber/ CO: City of Las Vegas ST: Nevada IN: SU: OFR

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Date:Apr 8, 1992

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