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The Regents of the University of California General Revenue Bonds

We are pleased to announce that Fidelity Capital Markets has been chosen as a co-manager for the University of California's upcoming $842 million1 General Revenue Bond sale.

What is the opportunity?

The Regents of the University of California are expected to come to market with $842 million1 in General Revenue Bonds.

The Regents plan to issue four series of Bonds. Fidelity will be accepting orders for three series in this offering: Series AR Bonds, Series AS Taxable Bonds, and Series AU Taxable Fixed Rate Notes.

These General Revenue Bonds will be used to finance or refinance all or a portion of projects on certain campuses of the University of California. In addition, these bonds will be used to finance projects critical to the university's mission of education and research.

The General Revenue Bonds are secured by a pledge of the university's general revenues (i.e., tuition, fees, net sales, and other revenues). These bonds will not constitute a liability of or a lien upon the funds or property of the State of California or of the Regents, except to the extent pledged as general revenues. The Regents have no taxing power.

As further described in the preliminary official statement, Series AR, Series AS, and Series AU are subject to optional redemption, and Series AR is subject to mandatory sinking fund redemption.

The Series AR bonds are federally tax-exempt and tax-exempt in the State of California, whereas Series AS bonds and Series AU Notes are taxable. The Bonds are rated Aa2 by Moody's, AA by S&P, and AA by Fitch.2

Key benefits

The bond sale offers attractive benefits to individual investors including prices and yields that match those available to institutional investors and the potential for stable income through the call dates. Interest on the Series AR bonds is exempt from federal income tax and, for California residents, exempt from state income tax.

How to place an order

The offering is expected to price the week of April 4,1 although market conditions or the discretion of the issuer may affect this timeline or the amount of bonds offered. Individual investors can place orders online or by calling a Fidelity representative at 800-554-5372. To stay up-to-date on pricing, credit rating changes, and more, please sign up for Fidelity Alerts or visit our Municipal Bond New Issue offerings page.

Additional resources

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

California State Treasurer
Learn more about how to invest in California bonds and notes.

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

MSRB—Risks and opportunities of interest rate movements (PDF)
Read about the impact of market interest rate movement on municipal bond prices and yields from the MSRB Education Center.

This information does not constitute an offer of any securities for sale.
1. Preliminary, subject to change
2. As of March 29, 2016. Ratings are subject to change or withdrawal by the ratings agencies at any time.
Interest income earned from tax-exempt municipal securities generally is exempt from federal income tax, and may also be exempt from state and local income taxes if you are a resident in the state of issuance. A portion of the income you receive may be subject to federal and state income taxes, including the federal alternative minimum tax. Before making any investment, you should review the official statement for the relevant offering for additional tax and other considerations.
The municipal market can be adversely affected by tax, legislative, or political changes and the financial condition of the issuers of municipal securities. Investing in municipal bonds for the purpose of generating tax-exempt income may not be appropriate for investors in all tax brackets or for all account types. Tax laws are subject to change and the preferential tax treatment of municipal bond interest income may be revoked or phased out for investors at certain income levels. You should consult your tax adviser regarding your specific situation.
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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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