I have not bought any individual bonds/notes other than through treasury direct. With 5k minimum, this maybe something I can afford Will there be a fee for purchasing this through, say Fidelity? Any idea if Vanguard is offering them.

I have no idea what other dealers will or will be not charging. Citi for examples charges me nothing to buy new issue bonds. I get them at underwriting price.

Only reason I know Fidelity was offering them is they are listed in the prospectus I posted and if you goto Fidelity web page then goto research then fixed income then new issue muni bonds they are listed and have an open order period between Oct 14 and 15.

You need to check with your broker to find out if they are going to offer them and what fee's if any you will be charged as that will change your YTM on these bonds.

Citi price talk is the expected "Coupon" only so that Citi customers have an idea of what the yield is before they order them. Price talk is not a guarantee rate either and is subject to change based on demand. I am assuming considering the order period does not open till Monday the current price talk is just Citi guess based on what VRDN and other Muni Discount notes are currently yielding in the open market. If MMF managers aggressively bid for these notes that yield could drop drastically on the flip side if MMF managers do not yield could go up drastically too as MMF managers are the largest buyers of short term notes.

I have a felling Ca lowered the minimum purchase amount because they think demand from MMF managers is going to be weak because I do not think right now many MMF managers are going to be waiting to buy 271 day notes when they are seeing huge amount of inflows and outflows on a weekly basis based on fear in the market. So I think Ca is hoping demand from retailer buyers will help drive down the rate they will ultimately have to pay on these notes.

NO SPAM

dolmar, is that you Arnold?

vickh said:can you find out the exact/approx yield before you buy?

are they AZ tax free ? if not anything like it in AZ??

These are CA state tax exempt and federal tax exempt. If you buy them you would still pay AZ state income tax. The Price Talk is estimated yield. Until they are issued you will not know the exact coupon and that coupon will be based on supply and demand. You can always buy them on the 2nd market except then you will pay the "Market Price" for them. That price could be higher or lower than the issue price. That is a risk you take.

vladgur said:can somebody post the cliff notes on making money on these bonds?

GEE I do not know 5% tax-free with final maturity of June 1 is 7 month. Unless you are a homeless person chances are you paying some federal taxes.So if you are in the lowest Federal tax bracket of 25% the yield would be 6.67%. if you happen to live in Ca or are not a homeless person(meaning your federal tax bracket is higher than 25%) then your yield is even higher as they bonds are CA state tax exempt too.

If you happen to know a better rate for a 7 month investment with as low of a risk as this please let us know.

No cliff notes needed for this deal..... Just 1/4 of a brain is needed to invest in these notes as it is not hard to understand the appeal these notes have.

dolmar said:I have no idea what other dealers will or will be not charging. Citi for examples charges me nothing to buy new issue bonds. I get them at underwriting price.

dolmar are you a citibank gold, smith barney, or private banking etc member? Just wondering what status is needed to get the bonds at underwriting price.

Add in LA Times this am: California residents (individuals) can buy during an early order period October 14th and 15th with no upfront sales commission. It's not clear if individuals from other states can participate (but as dolmar said they're only state-tax free in California).

From the California web site "Buy California Bonds": You must have an account with one of the brokerage firms participating in the bond or note sale. Bonds and notes cannot be purchased directly from the State. Individuals should check with their broker to learn about any other transaction or account maintenance fees.

Dolmar, thanks for your insights , are these considered the next safest thing to CD's and Treasuries?

vladgur said:can somebody post the cliff notes on making money on these bonds?
Very good question! Yes, if you are with Fidelity and have over 500K marginable, then margin to the hilt at 4% and hope you'll get over 5% on RANs.