Governor  Dannel P. Malloy
 

Frequently Asked Questions

  1. How can I buy State of Connecticut Bonds?
  2. What is a “retail priority order period”? What is a “pricing date”?
  3. When will I receive interest payments on Connecticut bonds? When will I get my principal payment back?
  4. What are some benefits of purchasing municipal bonds?
  5. Are there risks involved in purchasing municipal bonds?
  6. What does it mean if a bond is callable?
  7. What is the difference between buying a bond in the “primary” market versus the “secondary” market?
  8. Are there any sales commissions when buying Connecticut bonds?
  9. Does the State of Connecticut still issue College Savings Bonds?
  10. How can I obtain a copy of an Official Statement or other State disclosure information for a particular bond issue?
  11. I own State of Connecticut Bonds and I have a question concerning:
    • An interest or principal payment
    • Any notices that may have been issued to call the bonds prior to maturity
    • The registration of the bonds
    • A bond that has matured
    • A lost college savings bond certificate or similar question
  12. How are Connecticut Bonds issued?
  13. What are the differences between the Connecticut Bond Programs?
  14. How are Connecticut Bonds rated?
  15. I am interested in obtaining information about bonds issued by a State Quasi-Public Authority. Whom should I contact?

  1. How can I buy State of Connecticut Bonds?

    Step 1. Have or obtain a brokerage account.
    Bonds issued by the State of Connecticut on the primary market must be purchased through a Investment Advisor or Broker that is on the State’s qualified list. If you do not have an account at one of the participating firms, you may open one and purchase bonds or notes during the retail priority order period. Investors are encouraged to begin the new account process well in advance of the bond sale. Depending on the brokerage, internal new account procedures may take some time to process. Each firm has its own requirements for opening an account. The State does not endorse any particular brokerage firm. Additionally, the State does not guarantee that any one of these firms will open an account for an investor.

    Step 2. Learn about the bonds.
    Information about the State and its current and/or upcoming bond offerings may be found at www.buyctbonds.com. Bonds are only offered through an Official Statement (OS). A Preliminary Official Statement (POS) is the pre-sale offering document for bonds that is prepared for a particular transaction or bond sale. The POS discloses security features, economic, financial, and legal information regarding the bond issue as well as any other material news that merits disclosure to the investor community. A POS contains relevant information except for that determined on the pricing date of the bond sale (interest rates, maturity amounts, etc.).

    An OS contains the pricing data in addition to all of the information contained in the POS. The OS is typically not finalized until after the results of the bond sale or “pricing.” As a result, the OS discloses the results of the bond sale or pricing and details the data that is determined on the pricing date of the bond sale such as interest rates and maturity structures. Before purchasing a State of Connecticut bond, you should conduct your own due diligence by reading the POS or OS for that bond issue.

    In addition, on the www.buyctbonds.com, website you may submit a request to be added to the State of Connecticut Treasurer’s Office e-mail list to be notified of upcoming bond offerings.

    Step 3. Place an order to buy bonds.

    When the State issues new bonds, there is usually a retail priority order period for individual investors to place retail orders which is advertised to the public. Please contact your Investment Advisor or the Broker with whom you have an account for information about how to buy bonds or notes during the retail priority order period.


  2. What is a “retail priority order period”? What is a “pricing date”?

    The retail priority order period is a one or two-day period just before the pricing date when individual investors have first priority to place their bond orders with their broker. The pricing date is the day when the coupon rates, yields and prices for each bond maturity are finalized. It is important to note that the coupon and pricing information available during the retail priority order period is preliminary and will not be final until the pricing date, which is the following business day.


  3. When will I receive interest payments on Connecticut bonds? When will I get my principal payment back?

    When you purchase a State of Connecticut Bond, your principal investment will be returned to you at maturity. Until maturity, you will receive interest payments, generally semi-annually, until the maturity date of the bond. If you purchased a tax-exempt bond, your interest payments will be exempt from federal income tax and, if you are a Connecticut resident, your interest payments will also be exempt from Connecticut state income tax.


  4. What are some benefits of purchasing municipal bonds?

    Municipal bonds and notes can be an important part of a diversified investment portfolio. Because bonds and notes typically have a predictable stream of payments of principal and interest, many people invest in them to preserve and increase their capital, or to receive dependable interest income. If you purchase a tax-exempt bond, your interest payments will be exempt from federal income tax and, if you are a Connecticut resident, your interest payments will also be exempt from Connecticut state income tax. The tax advantage individual investors receive from tax-exempt bonds will vary depending on income level and other factors. It is important to consult with your Investment Advisor or Broker before purchasing bonds.


  5. Are there risks involved in purchasing municipal bonds?

    Investing in any bond carries certain risks that can vary from bond issue to bond issue. For example, such risks include, but are not limited to, credit risk and market risk. To evaluate the credit risks associated with a particular bond issue, you should review the Preliminary Official Statement of the offering in its entirety and consult your Investment Advisor or Broker.


  6. What does it mean if a bond is callable?

    Most municipal bonds are issued with an early redemption feature, typically referred to as a call option. A call feature gives the issuer of the bond the right, but not the obligation, to “call” back or redeem bonds after a specific amount of time has passed from the time of issuance. If a bond is called early, principal is repaid back in full to the investor and regular interest payments cease.


  7. What is the difference between buying a bond in the “primary” market versus the “secondary” market?

    New bond issues are sold in the primary market. In a new issue, the bond terms are set, including the initial price and interest rate, and the bonds are sold to investors, with the issuer receiving the proceeds of the sale.

    A secondary market transaction does not involve the issuer, but is a transaction between two investors – a buyer and a seller. Secondary market transactions involve a brokerage firm which acts either as an intermediary between the buyer and seller, or as a buyer or seller itself. Market conditions, such as prevailing interest rates, supply and demand, and credit quality, among other variables, determine the price of the bonds, which may differ from the original price.


  8. Are there any sales commissions when buying Connecticut bonds?

    An investor does not pay a sales commission when Connecticut bonds are purchased in the primary market during the retail priority order period. However, when purchasing bonds in the secondary buyers generally pay fees directly to the Investment Advisor or Broker for facilitating the purchase. Specifics are based on the fee arrangement the investor has with the broker-dealer.


  9. Does the State of Connecticut still issue College Savings Bonds?

    No, the College Savings Bond Program was discontinued. However, the Office of the Treasurer does offer a state-sponsored program for families to save and invest for higher education expenses called the Connecticut Higher Education Trust, or CHET. Under current law, earnings on CHET contributions are tax deferred at the federal level and state income tax exempt. Withdrawals are tax-free at both the federal and state level when used for qualified higher education expenses.An informational brochure and enrollment application may be obtained by calling 1-888-799-CHET or visit www.aboutchet.com.


  10. How can I obtain a copy of an Official Statement or other State disclosure information for a particular bond issue?

    Hardcopies of Official Statements, if available, may be obtained from your Investment Advisor or Broker. Electronic copies are available at http://buyctbonds.com/financial-data/official-statements-and-archives/ or by calling 1-877-552-8266.

    The State also provides certain disclosure information, including Official Statements, to Nationally Recognized Municipal Securities Information Repositories (“NRMSIR”) in accordance with the requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission (“SEC”).

    As of July 1, 2009, as directed by the SEC, the Municipal Securities Rulemaking Board (“MSRB”) has maintained a continuing disclosure service through its Electronic Municipal Market Access (“EMMA”) system.

    EMMA’s continuing disclosure service provides free electronic access to primary municipal market disclosure documents, ongoing disclosures, trade data, and other related information on the EMMA website at https://emma.msrb.org/issuerHomePage/Issuer?id=EF5DC425212E62F183AB2EC95C4E884F&type=G.


  11. I own State of Connecticut Bonds and I have a question concerning:
    • An interest or principal payment
    • Any notices that may have been issued to call the bonds prior to maturity
    • The registration of the bonds
    • A bond that has matured
    • A lost college savings bond certificate or similar question

    Please contact the Paying Agent and Registrar as follows:

    For State of Connecticut General Obligation Bonds (including College Savings Bonds), Special Tax Obligation Bonds, Bradley Airport Revenue Bonds, Bradley Parking Revenue Bonds, Clean Water Fund Bonds, and UConn 2000 Bonds:

    U.S. Bank, Global Corporate Trust Services
    Attn.: Bondholder Services – EP-MN-WS2N
    111 Fillmore Avenue East
    St. Paul, MN 55107-1402
    1-800-934-6802

    For The Connecticut Juvenile Training School Certificates of Participation:

    The Bank of New York Mellon
    Corporate Trust Operations
    111 Sanders Creek Parkway
    East Syracuse, NY 13057
    1-800-254-2826

  12. How are Connecticut Bonds issued?

    Since 1987, State of Connecticut bonds are generally issued in $5,000 denominations as fully registered book entry bonds, without physical certificates or coupons to clip.

    Bond purchases are recorded in an electronic computerized book entry form by the Depository Trust Company (“DTC”), a New York limited purpose trust company and member of the Federal Reserve System. DTC is also a registered clearing agency under the Securities Exchange Act of 1934, and holds securities for participants. Purchasers of book entry bonds under the DTC will receive a credit for the bonds on DTCs computerized records. Under this system individual bondholders do not receive physical certificates representing their ownership of the bonds, but should receive account statements of their holdings from their securities Investment Advisor or Broker.


  13. What are the differences between the Connecticut Bond Programs?

    The State of Connecticut currently issues bonds under four programs:

    • General Obligation Bonds (“GO”)
    • Special Tax Obligation Bonds (“STO”)
    • UConn 2000 Bonds
    • Clean Water Fund Bonds (“Green Bonds”)

    Visit http://buyctbonds.com/bond-program-summaries/ for summaries of the bond programs.


  14. How are Connecticut Bonds rated?

    Bond ratings depend on the security features of particular bond programs. Some bonds might have different credit ratings assigned to them by the rating agencies due to credit enhancements, such as bond insurance or letters of credit; or due to escrows or reserves established to pay principal and interest on refunded issues.The credit ratings for these major State of Connecticut bonding programs may be found here: http://buyctbonds.com/financial-data/state-of-connecticut-bond-ratings/.

    *General Obligation Bond Ratings Only

    The most recent credit ratings for a particular municipal bond can be obtained from the following credit rating agencies located in New York City.

    Fitch Ratings: 800-893-4824
    Kroll Bond Ratings: 212-702-0707
    Moody’s Investor Service: 212-553-0300
    Standard & Poor’s Global Ratings: 877-772-5436


  15. I am interested in obtaining information about bonds issued by a State Quasi-Public Authority. Whom should I contact?

    Below is a list of State Authorities that issue their own debt. Please contact them directly.

    Connecticut Health and Educational Facilities Authority

    10 Columbus Boulevard
    7th Floor
    Hartford, CT, 06106-1976

    www.chefa.com
    (860) 520-4700

     

    Connecticut Housing Finance Authority
    999 West Street
    Rocky Hill, CT, 06067
    www.chfa.org
    (860) 721-9501

     

    Materials Innovation and Recycling Authority
    200 Corporate Place
    Suite 202
    Rocky Hill, CT, 06067
    www.ctmira.org
    (860) 757-7700

    Connecticut Higher Education Supplemental Loan Authority

    10 Columbus Boulevard
    7th Floor
    Hartford, CT, 06106-1976

    www.chesla.org
    (860) 520-4001

     

    Connecticut Innovations
    865 Brook Street
    Rocky Hill, CT, 06067
    www.ctinnovations.com
    (888) 337-5454

     

    Capital Region Development Authority
    100 Columbus Boulevard
    Suite 500
    Hartford, CT, 06103
    www.crdact.net
    (860) 527-0100


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