State and local governments sell municipal bonds to finance public capital projects. In recent years, the City of Cambridge has issued municipal bonds for upgrades to municipal and school buildings, renovation of historic open spaces and buildings, and reconstruction of streets, sidewalks, sewer systems, and transportation corridors.
All municipal bonds previously sold by the City of Cambridge were sold in denominations of $5,000 or more. Minibonds are more affordable than traditional municipal bonds for certain potential investors, as they will be available in minimum denominations of $1,000 to investors who are Cambridge residents.
Interest on minibonds will be paid semiannually. The 2018 Cambridge minibonds will mature in five years, whereas most Cambridge municipal bonds mature after 10 or 20 years.
The City will use minibond proceeds to fund capital projects such as school building renovations, municipal facility upgrades, and implementation of our Complete Streets plan.
Yes, in February 2017 the City of Cambridge issued its first minibond sale and sold all $2 million of its minibonds. The City earned the Non-Traditional Deal of the Year from The Bond Buyer for its inaugural minibond sale.
Cambridge residents age 18 and over can purchase minibonds in minimum denominations of $1,000.
Parents and legal guardians of individuals under age 18 can purchase minibonds as a Custodian for a Minor and hold the bonds until the minor turns 18.
Minibonds may not necessarily be suitable for all investors and prior to completing any sale, Neighborly Securities* or another broker-dealer will determine suitability for investors in accordance with applicable laws and regulations.
City Council members and Executive and Finance staff are ineligible to purchase bonds.
*Minibonds will only be offered through Neighborly Securities, member MIA, SIPC and registered with MSRB pursuant, to a preliminary and final official statement to be made available during the offering period. This information does not constitute an offer to sell or the solicitation of an offer to sell any securities. You will be responsible for making your own independent investigation and appraisal of the risks, benefits and suitability of any securities to be offered and neither the City of Cambridge nor Neighborly Securities is making any recommendation or giving any investment advice.
Residents who are interested in buying Cambridge minibonds should create an account through Neighborly before February 16, 2018. Neighborly expects to offer residents minibonds through an online platform, which is expected to go live on a date to be determined for the 2018 minibond sale.
Neighborly is a San Francisco based firm, and provides underwriting services through its registered broker dealer subsidiary, Neighborly Securities. Neighborly is not affiliated with the City of Cambridge in any way, other than as the broker-dealer for this sale of minibonds.
Each Cambridge resident may buy up to 25 minibonds for a total possible investment of $25,000 (25 x $1,000/minibond).
There is no fee to purchase Cambridge minibonds through Neighborly. Other brokers may charge their customary fees.
The City expects to sell up to $2.5 million of minibonds in its second minibond sale. Minibonds will go on sale on a date to be determined in February 2018.
Interest will accrue and be paid semi-annually in February and August, to the maturity date of the minibonds. Principal will be paid at maturity.
Cambridge minibonds will not be subject to redemption prior to maturity.
The interest rate on the bonds is 2%.
Neighborly representatives will be at Cambridge City Hall on February 15th and the 21st, 2018 from 5:30-7:30pm to discuss the minibond process and provide assistance with the sign up and order process.
After you submit your order, Neighborly’s investment team reviews it for approval and allocation. Completing your order with Neighborly is a three-step process. If your order is approved, minibonds will then be allotted and filled on a first-come, first-serve basis. Typically, bonds will be delivered 1-2 weeks after the sale date and investors are not obligated to remit funds until they receive a confirmation from their broker.
For further information about the process please contact a Neighborly representative at firstname.lastname@example.org, or at (866) 432-1170.
**Orders from the 2017 minibond waiting list do not carry over to the 2018 minibond process. The 2018 process is once again, a first-come, first-serve process until the minibonds are sold out.**
Minibonds may be transferred or sold to another person or entity provided they have a valid brokerage account with Neighborly or another broker-dealer. Contact Neighborly at email@example.com, or at (866) 432-1170 to discuss this option because transfer fees may apply.
Detailed information about the minibonds and the City will be included in a Preliminary Official Statement prepared by the City. It is expected to be available February 2018.