When the Salt River Project has a new utility project, it sells municipal bonds to raise the needed funds. SRP municipal bonds pay a fixed interest rate over the life of the bonds. The interest income is exempt from federal and state taxes. Located in Arizona, the SRP is one of the largest public utilities in the country. The utility provides water and electrical services for the Phoenix area and surrounding counties, and manages existing resources. You can purchase bonds when they are first issued directly from the SRP trustee or purchase previously issued bonds on the secondary market.
Research Existing Bond Offerings
You can go to the SRP website to find information about the current bond offerings. The announcement lists the bond series, the original par value amount and the date the bonds were first offered for sale. Each series has a link you can follow that provides additional in-depth information. You can compare the interest rate, bond yield, maturity date and credit rating for each series. You can find the bond’s current selling price by following the CUSIP link provided on the website.
Contact the SRP trustee to get your name put on the list so you can be notified when the next bond offering becomes available. Information about the current trustee, US Bank, is available on the SRP website. The trustee can send you a bond prospectus or you can review the online prospectus on the SRP website. The trustee can send you the purchase documents you need to complete before the bond sale is announced. You can use the prospectus information to help you decide how much money you want to invest.
Purchase Your Bonds
The SRP trustee will contact you when the next bond float is available. A trustee representative will review the terms of the offering with you to see if the bonds meet your investment needs. You can give your bond purchase order directly to the trustee rep and let her know how many bonds you want to buy. The trustee rep will give you the total amount you need to tender to complete your purchase. The trustee holds your bonds electronically once your payment is received and processed.
Secondary Market Purchases
You can purchase SRP municipal bonds on the secondary bond market if you don’t want to wait for the next bond issue. The secondary market is made up of investors who sold their bonds before maturity. The bonds are then resold to other investors through the over-the-counter bond market. Your broker can research the available SRP bonds to get you the best price. You can hold the bonds until they mature to earn the maximum amount of interest.
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