Rules Only Apply to Buyers of the First Subordinate Series 2009A Bonds – Exempt from Federal, State, and Local Income Taxes
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The Government of Puerto Rico is committed to making bonds available to individuals on a first priority basis through an early order period known as the Retail Order Period. |
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What is the Process? |
| The Retail Order Period for the Puerto Rico Sales Tax Financing Corporation, First Subordinate Series 2009A Bonds will occur during the two days before the official bond pricing. |
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- Through the end of the Retail Order Period, investors can submit orders through their broker. Bonds cannot be purchased directly from the Government of Puerto Rico.
- Brokers submit investors’ orders for bonds in specific amounts and maturity dates based on approximate interest rates.
- Once the bond sale is completed, usually the day after the Retail Order Period, interest rates are finalized.
- Retail investors are notified of the status of their order and the final pricing. (Note: The ability to fill individual orders depends on the amount of bonds available and the amount of orders. While there is no guarantee, individual orders usually are filled.)
- Investors who order bonds during the Retail Order Period have the right to change, or cancel, their order until the order has been confirmed after final pricing, if the interest rates are decreased.
Individuals should consult their broker to learn about any particular process the firm may have for participating in Retail Order Period s for the Puerto Rico Sales Tax Financing Corporation’s bond sales.
Before placing an order, investors should read Preliminary Official Statement for the Puerto Rico Sales Tax Financing Corporation, First Subordinate Series 2009A Bonds. |
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Who Can Participate? |
“Retail investors” are defined to include individuals as well as bank trust departments, investment advisors and money managers acting on behalf of individuals.
- Individual investors purchasing bonds to hold as an investment may purchase during the Retail Order Period.
- Individuals may place orders directly with a broker, or they may have a bank trust department or investment advisor place the order on their behalf.
- Generally, orders may not exceed $1 million. Larger orders are subject to prior approval by the Government Development Bank for Puerto Rico or the senior managing underwriter.
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Advantages to Individual Investors: |
Purchasing bonds during the Retail Order Period provides advantages to individual investors:
- They get to place orders before institutional investors, such as mutual funds or insurance companies.
- They earn the same return on their investment as other investors who buy bonds with the same maturity date after the early order period.
- They do not pay the upfront brokerage fee/commission. (Individuals should check with their broker to learn about any other transaction or account maintenance fees the firm may charge.)
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