How To Purchase St. Louis Bonds

There are two markets for municipal bonds:  the primary market and the secondary market.  The primary market refers to the initial issuance and sale of bonds by an issuer.  The secondary market refers to the subsequent purchase and sale of bonds by bondholders after the initial issuance.

Provided below is a general description of how to buy bonds issued by the City of St. Louis and its related issuing agencies and authorities (collectively, the “City”) in each market.  The information provided below is not investment advice.  Please contact your investment advisor for investment advice.

Primary Market Purchases

The City sells its bonds in the primary market through brokerage firms to various purchasers, including individual investors and institutional investors (such as bond funds and insurance companies).

In some circumstances, individual investors will be provided with an opportunity to place orders to purchase bonds before institutional investors are invited to do so.  This early order period is frequently referred to as the “Retail Order Period.”  The Retail Order Period generally occurs one to two days prior to the official bond sale date.  Orders from Missouri residents are given priority during the Retail Order Period.

The following is a step-by-step process for purchasing bonds in the primary market:

Step 1: Have a Brokerage Account

The City does not directly sell its bonds to investors in the primary market.  Rather, the City sells its bonds through brokerage firms that comprise the underwriting syndicate (the brokerage firms selected by the City to participate in the initial bond sale).  To buy a City bond, you must have an account either with a member of the underwriting syndicate or with another brokerage firm that can place your order through a member of the underwriting syndicate.

If you have a brokerage account, please proceed to Step 2.  If you do not have a brokerage account, you will need to open one in order to purchase bonds.  Each brokerage firm has its own requirements for opening an account and the new account process may take some time to complete.  Investors are encouraged to begin the process well in advance of a bond sale date.

The City does not endorse any particular brokerage firm and the City does not guarantee that any particular brokerage firm will open an account for an investor.

Step 2: Learn About the Bonds

Read the preliminary official statement or the final official statement, as applicable.  Preliminary and final official statements contain detailed information about a bond offering, including a complete description of the security for the bonds, the principal maturity (repayment) dates, interest payment dates, credit ratings, and the use of the bond proceeds.

A thorough review of the entire preliminary or final official statement is essential to making an informed investment decision.

Step 3: Place your Order

Contact your brokerage firm for more information on how to buy bonds during an initial offering.  You may wish to discuss with your brokerage firm or investment advisor the amount you wish to invest, when you would like your investment returned to you, the interest you would like to earn on your investment, as well as any questions you may have after reviewing the preliminary or final official statement.      

Secondary Market Purchases

In addition to purchasing City bonds during the initial offering, individual and institutional investors may be able to purchase City bonds in the secondary market.

The following is a step-by-step process for purchasing bonds in the secondary market:

Step 1: Have a Brokerage Account

To buy a City bond in the secondary market, you must have an account at a brokerage firm.  If you have a brokerage account, please proceed to Step 2.  If you do not have a brokerage account, you will need to open one in order to purchase bonds.  Each brokerage firm has its own requirements for opening an account and the new account process may take some time to complete.

The City does not endorse any particular brokerage firm and the City does not guarantee that any particular brokerage firm will open an account for an investor.

Step 2: Learn About the Bonds

Read the final official statement for the series of bonds that you are considering.  Final official statements for the City’s general obligation, leasehold revenue, airport revenue, and water revenue bonds can be accessed here.  A final official statement contains information about the bonds at the time of initial offering.  Because the final official statement speaks only as of its date, the information will not be current as of the date of the secondary market purchase.

Review any continuing disclosure information for the bonds you are considering.  Continuing disclosure information consists of certain updates that the City provides on an ongoing basis after the bonds are sold in the primary market.  In addition, continuing disclosure information, in the form of material events notices, can also notify investors of certain important events, such as principal and interest payment delinquencies, credit rating changes, modifications to bondholders’ rights, etc.

A thorough review of the entire final official statement and any continuing disclosure information is essential to making an informed investment decision.

Continuing disclosure information can be accessed at the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) website.   The Municipal Securities Rulemaking Board is responsible for its website and the information provided there.

You may also wish to review current market bond prices.  The Securities Industry and Financial Markets Association (“SIFMA”) provides a “Municipal Market At-A-Glance” overview with real-time price information.  SIFMA is responsible for its website and the information provided there.

Step 3: Place your Order

Contact your brokerage firm for more information on how to buy bonds in the secondary market.  You may wish to discuss with your brokerage firm or investment advisor the amount you wish to invest, when you would like your investment returned to you, the interest you would like to earn on your investment, as well as any questions you may have after reviewing the final official statement, any continuing disclosure information, and current market bond prices.