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New Offering: The State of California Department of Water Resources Power Supply Revenue Bonds

We are pleased to announce that Fidelity Capital Markets has been chosen as a co-manager for the State of California Department of Water Resource's upcoming $765 million1 Power Supply Revenue Bonds sale.

What is the opportunity?

The State of California Department of Water Resources will come to market with $765 million1 in revenue bonds. The bonds are rated "Aa2" by Moody's and "AA" by S&P2.

The bonds are payable primarily from charges ("Bond Charges") to be imposed by the California Public Utilities Commission ("CPUC") upon the approximately 11.5 million bundled customers and certain direct access, departing load and Community Choice Aggregation customers in the service areas of three major investor-owned electric utilities in the State of California (see POS for more details). The bonds are being issued to refund certain outstanding Series 2008H Bonds and Series 2010L Bonds. The bonds are not an obligation of the State California.

Key benefits

The bond sale offers several attractive benefits for individual investors who are residents of California, including the potential for stable, tax-exempt income; priority allocation when bonds are issued; and prices and yields that match those available to institutional investors.

How to place an order

Individual investors may place orders starting Tuesday, March 311 . The sale may close early, due to market conditions or because all bonds may be allocated.

Additional resources

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

California State Treasurer
Learn more about California bonds and notes and about how to become an investor.

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

Q4 bond update: Oil price shock wave
See what our experts are saying about the bond market and why they're recommending a cautious approach.

This information does not constitute an offer of any securities for sale.
1. Preliminary, subject to change
2. As of March 26, 2015. 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.


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


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



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