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The University of Connecticut General Obligation Bonds

The University of Connecticut has chosen Fidelity Capital Markets to serve as a co-manager on its upcoming $120 million1 General Obligation Bond and $100 million1 General Obligation Refunding Bond sale.

What is the opportunity?

  • Potential for stable, tax-exempt income for Connecticut residents2
  • Bond ratings of Aa3 from Moody's, and AA from S&P3
  • Bonds are secured by a general obligation pledge of the University and a pledge of, and lien on, the State's Debt Service Commitment. However, the bonds do not obligate the State or any municipality or political subdivision to levy or pledge any form of taxation. The University has no taxing power.
  • Same prices and yields to individual investors as institutional with allocation priority given to Connecticut state retail clients

When can I place my order?

We expect individual investors to have retail priority Friday, April 4 through Monday, April 7. Please note that the underwriters may close the retail period (or certain maturities) early due to market conditions, or in the event the bonds are all sold. As a result, interested individual investors are encouraged to place their orders at their earliest convenience.

Additional resources

Municipal Bonds
Review the risks and benefits of investing in municipal bonds.

Municipal Bonds: Understanding Credit Risk (PDF)
Learn more about assessing credit risks when purchasing municipal bonds in this SEC investor bulletin.

Investing in a volatile bond market
Get the latest insights on the bond market, outlook for future rates, and investments strategies from Fidelity Viewpoints®.

Four tips for bond investors
Learn more about buying individual bonds, finding potential opportunities, and avoiding common pitfalls.

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Bond

an interest-bearing security for which the issuer agrees to pay the bondholder a specified sum of money, usually at specific intervals (known as a coupon), and to repay the principal amount of the loan at maturity; Zero-coupon bonds pay both the imputed interest and the principal at maturity

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maturity, maturity date(s)

the date on which the principal amount of a fixed income security is scheduled to become due and payable, typically along with any final coupon payment. It is also a list of the maturity dates on which individual bonds issued as part of a new issue municipal bond offering will mature

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Moody's

an independent organization that assigns credit ratings to debt instruments and securities to help investors assess credit risk

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Standard & Poor's (S&P) Corporation

an independent company that provides investors with market intelligence in the form of credit ratings, indices, investment research and risk evaluations and solutions

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yield

the percentage of return an investor receives based on the amount invested or on the current market value of holdings; it is expressed as an annual percentage rate; yield stated is the yield to worst — the yield if the worst possible bond repayment takes place, reflecting the lower of the yield to maturity or the yield to call based on the previous close

Questions?

This information does not constitute an offer of any securities for sale.
The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities.
1. Preliminary, subject to change
2. Interest income generated by tax exempt municipal bonds is generally expected to be exempt from federal income taxes and, if the bonds are held by an investor resident in the state of issuance, state and local income taxes. Such interest income may be subject to federal and/or state alternative minimum taxes. Investing in municipal bonds for the purpose of generating tax-exempt income may not be appropriate for investors in all tax brackets. Generally, tax-exempt municipal securities are not appropriate holdings for tax advantaged accounts such as IRAs and 401(k)s.
3. As of March 19, 2014. Ratings are subject to change or withdrawal by the rating agencies at any time. Please refer to the Official Statement for more detailed credit rating information including credit outlook.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties.
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