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City Announces Second Minibond Issuance, Invites Residents to Directly Invest in Cambridge

Image of Charles River and Weeks Footbridge

Cambridge residents will once again have the chance to invest directly in Cambridge infrastructure by purchasing minibonds. The City expects to sell up to $2.5 million of minibonds in its second minibond sale, which will take place from February 20-26, 2018. Minibonds enable residents to earn tax-exempt interest and invest for the future while supporting the Cambridge capital budget. Each Cambridge resident may purchase up to 25 minibonds for a total possible investment of $25,000 (25 x $1,000/minibond). The interest rate on the 2018 minibonds is expected to be determined on February 20, 2018 and interest will be paid semiannually.  Principal on the 2018 minibonds will be paid in five years, in 2023.

“For many years, the City of Cambridge received calls from residents asking how they could buy the City’s Bonds,” said Cambridge City Manager Louie DePasquale. "Our minibonds are a great way to provide Cambridge residents a way to invest directly in City projects that will benefit our entire community. There was a lot of demand from our citizens and we sold out early last year, so we are excited to expand our minibonds offerings to Cambridge residents this year.”

A minibond is similar to a traditional municipal bond in which investors loan money to a city or public agency for an agreed period of time, receive interest on the investment, and get their loan paid back when the bond matures. The City plans to use minibond proceeds to support capital projects such as school building renovations, municipal facility upgrades, and implementation of the Complete Streets plan.

Last year, the City sold out of $2 million in minibonds, in its first ever issuance. Additionally, the City’s minibond issue was awarded the 2017 “Deal of the Year” by the Bond Buyer in the non-traditional financing category. The annual award recognizes innovative municipal financial practices and recognized the City for its minibond program.

All municipal bonds previously sold by the City were sold in denominations of $5,000 or more. Minibonds are different because residents can purchase them for as little as $1,000, making them more accessible than traditional municipal bonds for potential investors.

The City is working with Neighborly Securities* to issue the minibonds. Neighborly is not affiliated with the City of Cambridge in any way, other than as the broker-dealer for this sale of minibonds.

Minibonds will only be offered to investors following the release of a Preliminary Official Statement of the City that will describe the terms of the minibonds and provide other financial information concerning the City.  The City expects to release a Preliminary Official Statement by February 15, 2018.

Residents who are interested in buying Cambridge minibonds will need to create an account through Neighborly.com before the order period ends or purchase minibonds through their own broker. Once a minibond order is submitted through Neighborly, Neighborly’s investment team reviews it for approval and allocation.  If the order is approved, minibonds will then be allotted and filled on a first-come, first-serve basis.  Neighborly representatives will be at Cambridge City Hall, 795 Massachusetts Avenue on Thursday, February 15, from 5:30-7:30 p.m. and Wednesday, February 21, from 5:30-7:30 p.m. to provide assistance and discuss the minibond process.

For questions about setting up an account with Neighborly to purchase minibonds, please contact Neighborly at 1-866-432-1170, support@neighborly.com, or www.neighborly.com/cambridge.

For general questions about Cambridge minibonds, please visit minibonds.cambridgema.gov or contact the City’s Budget Office at minibonds@cambridgema.gov or (617) 349-4270.  

*Minibonds will only be ordered through Neighborly Securities, member FINRA, SIPC & registered with MSRB, pursuant to a preliminary and final official statement to be made available during the ordering period. This information does not constitute an order to sell or the solicitation of an order to buy 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 ordered and neither the City of Cambridge nor Neighborly Securities is making any recommendation or giving any investment advice.

Page was posted on 1/31/2018 12:38 PM
Page was last modified on 2/4/2020 11:08 AM
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