Definitions
- Account
- Action
- Bonds/Shares
- Confirmed
- E-Mail Address/Pager PIN
- Indication of Interest Reference Number
- Issuer Name
- Market
- Method of Notification
- Price Range
- Price Type
- Quantity up to n Bonds
- Quantity up to n Shares
- Yield Range
New issue offerings are fixed income securities (e.g., bonds) that you purchase directly from the issuer, usually at face value, through Fidelity. For example, you can buy a Treasury Auction bond directly from the U.S. government at face value.
About New Issue Offerings
- Am I authorized to participate in new issue offerings?
- What types of new issues are available to purchase on Fidelity.com?
Minimums, Restrictions, and Fees
- What are the minimum quantities for new issue offerings?
- What are the fees and restrictions on Treasury auctions?
- What are restrictions on new issue CD offerings?
Indications of Interest
- What is an indication of interest?
- What do I have to do before entering an indication of interest?
- How do I submit an indication of interest?
- How do I confirm an indication of interest?
- How do I view an open indication of interest?
- How do I withdraw or change an indication of interest?
- Am I guaranteed an allocation of new issue securities?
- What kind of notification or confirmation do I receive once an offering has been allocated?
- What are the different stages of a new issue Municipal Retail Order Period?
Related Help Topics
ABOUT NEW ISSUE OFFERINGS
Am I authorized to participate in new issue offerings?
To participate in new issue Municipal offerings, you must have a Fidelity brokerage account, and you must be signed up for Fidelity Alerts. For all other new issue product types, it is recommended that you are signed up for Fidelity Alerts. Fidelity Alerts allows you to receive new issue notifications as well as other account or trade related information by email.
To set up Fidelity Alerts, select Research, then Alerts. Select Fixed Income New Issues and Secondary Products in the Products and Offerings section. Read the description of the alert, and choose the alert(s) that is appropriate for you.
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What types of new issues are available to purchase on Fidelity.com?
- Municipal
- Certificates of Deposit
- Corporate Notes ProgramSM
- Agency/GSE
- Structured Products
- Treasury Auctions, including TIPS Auctions
For detailed information each of these new issue types, go to Products, then Fixed Income.
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MINIMUMS, RESTRICTIONS, AND FEES
What are the minimum quantities for new issue offerings?
- For new issue municipal bonds, the minimum quantity is 5 bonds (typically costing at/around $5,000 or at/around $1,000 per bond), with increments of 5 bonds thereafter.
- Treasury auctions, new issue CDs, and CorporateNotes Program offerings have a minimum quantity of 1 bond (typically costing at/around $1,000 per bond), with increments of 1 bond thereafter.
- New Issue Agency/GSE offerings vary in minimum and increment quantity. Generally, minimums range from 1 to 10 bonds. Increments range from 1 to 5 bonds.
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What are the fees and bidding restrictions on Treasury auctions?
- There is no charge for Treasury Auction orders placed online at Fidelity.com. A $19.95 fee will be charged on all Treasury Auction orders placed through a Fidelity representative.
- Non-competitive bids are limited to no more than $5 million in a bill, note, bond, or TIPS auction.
- A bidder bidding competitively for his or her own account may not bid non-competitively for his or her own account in the same auction.
- Prior to the designated closing time for receipt of competitive tenders, a non-competitive bidder may not enter into any agreement to purchase or sell or otherwise dispose of the securities that may be acquired in the auction.
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What are restrictions on new issue CD offerings?
Not all CDs are available in every state. Each state has its own set of laws to offer securities for sale in its state, and those laws are referred to as Blue Sky laws. As a result, a state restriction is known as a Blue Sky restriction and will vary by the issuing bank and offering. On Fidelity.com CD pages, "SKY" is used as an Attribute to identify those CDs with Blue Sky restrictions. Click SKY to see the restricted states.
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INDICATIONS OF INTEREST
What is an indication of interest?
For New Issue Municipal bonds and Structured Products, you can submit an indication of interest to let Fidelity know that you want to become eligible to receive an allocation of securities. You submit information such as the brokerage account (from which the funds to pay for the securities will eventually be deducted if allocated), the security's CUSIP number and the maximum number of securities that you would like to receive. By placing an indication of interest, you are participating in a new issue offering.
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What do I have to do before entering an indication of interest?
Before entering an indication of interest, review the preliminary official issue document (prospectus, preliminary official statement, offering circular, or term sheet). These documents contain information about the offering and issuer that the underwriter and issuer decided an investor should know in order to make an informed investment decision. You can view preliminary official issue documents by clicking the relevant link next to the issue in question.
Next, sign up for New Issue Offering Alerts within the Fixed Income Alert section, by going to Research, then Alerts and then selecting Fixed Income New Issues & Secondary Products under the Products & Offerings section. This will allow Fidelity to send you notification of the price and size of the offering.
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How do I submit an indication of interest?
On the Search Results page for a relevant new offering (for example, municipal bonds, corporate bonds, etc.), click Participate. Select the account in which you want to purchase and pay for the securities.
To have the opportunity to participate in a new issue offering, proceed to the Enter Indication of Interest page and enter an indication of interest in which you specify the maximum number of bonds you are interested in purchasing. In most cases, 1 bond is equal to $1,000 face value. For example, if you want to buy $5,000 face value of a municipal offering, you enter 5 in the Quantity field. Some offerings have minimums greater than 1 bond.
Once you've entered the quantity, select Preview Order. To place the indication of interest, select Place Order.
How do I confirm an indication of interest?
You receive a notification once an offering for which you've submitted an indication of interest has been priced and the size of the offering has been announced by the underwriter.
If pricing of the security remains unchanged or moves lower, you will not need to take any action to confirm an indication of interest.
If pricing of the security moves higher, you will receive an alert that requires you to take further action if you wish to cancel your indication of interest. If you fail to contact Fidelity to cancel the indication of interest prior to final pricing, you will participate in the allocation process.
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How do I view an open indication of interest?
To view an open indication of interest, select the Accounts & Trade tab and select the Trade option. Then select Orders from the left-hand status bar, then click Indications of Interest from the Order Details page. The Indication of Interest Details page will display.
The Indication of Interest Details page displays all open indications of interest for the following types of new issue offerings:
- New Issue Municipal bonds
- Structured Products
From this page, you can edit or cancel an indication of interest.
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How do I withdraw or change an indication of interest?
If you do not want to purchase the bonds, you must withdraw (delete) any indication of interest prior to the final pricing of bonds. If you fail to contact Fidelity to cancel the indication of interest prior to final pricing, you will participate in the allocation process.
To delete an indication of interest, go to the Indications of Interest Order Details page. To go there, select Orders from the Select Action dropdown menu on the Account Summary page. Then, on the Order Details page, click the Indication of Interest hyperlink at the top. Select the account for which you've submitted the indication of interest. To update an Indication of Interest, click Edit or Cancel next to the issue that you wish to update.
Attempts to edit or cancel indications of interest are performed on a best efforts basis. There is no guarantee that an indication of interest can be changed or deleted, in whole or in part.
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Am I guaranteed an allocation of new issue securities?
No- entering an order makes you eligible for but does not guarantee an allocation of bonds. If the offering is oversubscribed (more bonds were requested than available for purchase) and you did not withdraw your order, you may receive the quantity of bonds you requested, a portion of the bonds you requested, or none at all. Fidelity allocates bonds as fairly and equitably as possible.
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What kind of notification or confirmation do I receive once an offering has been allocated?
Once an offering has been allocated, the securities are placed in your account. You can check your account history or positions on Fidelity.com to see if you received an allocation of securities. When you submitted an indication of interest, a notification was sent via email that you registered when you signed up for Fidelity Alerts.
Once securities are allocated, you receive a written confirmation. For new issue municipal offerings, the official statement (OS) is available on MSRB's Electronic Municipal Market Access (EMMA) website at https://emma.msrb.org/. The OS contains the same type of information included in the preliminary document, along with amendments such as the exact size of the offering, the net proceeds going to the issuer, and the concession being given to the underwriter.
If you purchase new issue CDs, you receive a written confirmation statement and the Certificate of Deposit disclosure statement.
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What are the different stages of a new issue Municipal Retail Order Period?
The Retail Order Period (ROP) available for customers to place an order for a New Issue municipal bond can vary widely from issue to issue. Some of those conditions are outlined below:
- The ROP may only be a couple of hours or may last up to two days.
- Some CUSIPs may not be available for the entire duration of the ROP due to over-subscription.
ROPs generally open around mid-morning, for example 10am ET. However, as some deals are priced at a spread to the Treasury, the ROP may be delayed by hours or re-scheduled in a volatile marketplace. For this reason, customers can experience some level of frustration when attempting to place an order.
The following serves as an illustration of the life of a New Issue Municipal bond issuance:
- Deal Announced
- Deal announcement can vary widely. Generally though, customers may start to call in with questions about an upcoming deal about a week prior to the ROP, as they will have heard about the offering on the radio, or from another broker/dealer.
- Preliminary Pricing
- The marketplace will set an appropriate price for the series of bonds being offered. This is represented by the Price and Yield information available on that new issue municipal bond's Detailed Offerings page on Fidelity.com.
- Retail Order Period
- The Retail Order Period can last anywhere from a couple of hours to two days. It is important for customers to monitor their alerts, as they will receive emails for upcoming offerings. Expected Order Period information is available on the alert, and on the New Issue Municipal Page.
- ROPs can close early, if an issue becomes oversubscribed.
- ROPs can be delayed in the event of a volatile marketplace.
- Institutional Order Period
- The Institutional Order Period (IOP) generally occurs after the ROP, and lasts 1 day.
- Final Pricing
- Final Pricing is generally available the day after the IOP, and is typically out either late morning or early afternoon.
- Final pricing levels may differ from preliminary pricing levels:
- If Final price is the same or better for the customer (price is lower/yield is higher), then customers cannot cancel their Indication of Interest (IOI) and will participate, subject to allocation.
- If Final price is worse for the customer (price is higher/yield is lower), then customers IOIs are filled unless they contact Fidelity to cancel their IOI. Oftentimes, the cancellation window is very brief.
- Allocation
- Allocation generally occurs the day following final pricing. Often, customers may receive full allocation, meaning if the order is, for example, 25 bonds, the customer will receive all 25. On occasion, an order will be oversubscribed. In these cases, customers might receive a partial or possibly even no allocation.
- Balances
If a deal is undersubscribed, Fidelity may post balances of new issues to its website.
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Related Help Topics
- Trading Bonds/Fixed Income Securities
- Search Secondary Offerings
- Searching Fixed Income Inventory
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