Private investors are showing great interest in the new $20 million Government Bond Issue, say the Bank of Butterfield, which is underwriting the offer.

With only a few days to go before the issue closes at noon on Monday, the Bank has virtually reached its target of selling at least $5 million worth of bonds to individual investors.

Mr. David Notman, the Bank's investments manager, said the Bank will go beyond this amount if there is the demand. The rest of the issue is being sold to institutions.

The Bank has taken on the complete liability of the issue by purchasing all of the bonds from Government.

Mr. Notman said: "It's a case of distributing them as broadly as possible because this is what Government wants to do.

"Government knew this would be an attractive issue and the institutions would be quite willing to gobble the whole thing up. But it wanted the public to have first chance.

"We wanted to sell at least $5 million worth to the general public and we're just about there. If we have to go over the $5 million mark to satisfy retail demand we will certainly do it.'' He added: "There is certainly a place in most people's portfolios for this issue.

"The attractive rate of return is very competitive and, with overseas rates, especially for the US dollar, so low, this is a chance to lock in a 6.5 percent return for five years.

"The minimum subscription of $1,000 makes the issue even more attractive to the smaller investor.'' The bonds are expected to be listed on the local exchange, allowing holders to sell the bonds before they reach maturity, on November 30, 1997.

"Although investors are guaranteed a handsome rate of interest for five years they can liquidate their investment at any time,'' said Mr. Notman. "This is an additional advantage of subscribing to the issue.'' Mr. David Notman.