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| Product Overview |
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| The CorporateNotesSM program provides the retail investor the opportunity to buy fixed income securities directly from the issuer at par. This provides retail investors with a security which is generally simpler to assess as it is not yet subject to accrued interest, price fluctuation, or possible mark-ups or commissions. |
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CorporateNotes are fixed-rate, unsecured senior and subordinated obligations of one of several companies or issuers. |
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Each week, the issuers post a series of rates, maturities, structures and payment frequencies which are generally available until the following week (although the issuers reserve the legal right to cancel or change the offerings without notice). All bonds are available at par in $1,000 increments with no accrued interest. |
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| Who may want to invest in CorporateNotes? |
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| CorporateNotes may be appropriate for a variety of investors: |
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Investors seeking to diversity a portfolio - available at par, no accrued interest, and small minimum investment. |
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Income-oriented investors looking for stable payment streams. |
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IRA accounts looking for "odd-lot" bonds at par - $1,000 increments. |
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Investors looking to create a laddered fixed income portfolio - presented each week with different maturities and payment frequencies. |
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Estate planning - a survivor's option can remove market risk from estate planning - put or "return" bond back to the issuer at par in event of holder's death. Investors should refer to the prospectus for specific details. |
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The CorporateNotes ProgramSM is designed for the buy-and-hold investor. However, a limited secondary market may exist for these securities in the event an investor wishes to liquidate a position prior to maturity. |
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Only individual investors and their financial advisors know whether participating in the CorporateNotes ProgramSM is appropriate for them. This should not be construed as a recommendation or as investment advice by Fidelity. |
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| Who would not be an appropriate investor in CorporateNotes? |
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| CorporateNotes are not appropriate for these types of investors: |
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Any institution. CorporateNotes are available for retail customers only. No orders will be accepted for an institutional account. |
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An investor expecting significant capital appreciation. |
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An investor intending to trade or sell securities prior to maturity. |
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| Features and Benefits |
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- All CorporateNotes are priced at par with no accrued interest and are available in increments of $1,000. |
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- Most CorporateNotes contain a Survivor's Option. In the event of death, the Survivor's Option permits the holder's estate, at the option of the estate, to return (or put) notes back to the issuer at par. This feature is attractive, particularly during periods of historically low interest rates, as it protects principal invested in a rising interest rate environment. The Survivor's Option may help remove market risk from estate planning. Some limitations and restrictions apply: investors are urged to read the prospectus for full disclosure of the feature and to verify its presence. Please note: SLM Corp EdNotes® and Toyota CoreNotes® issued by Toyota Motor Credit Corporation do NOT carry the Survivor's Option.
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- The nature of the program is ideal for investors looking to create a laddered portfolio. |
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- Non-callable structures remove re-investment risk and call risk from portfolio holdings by protecting investors from a decline in interest rates. Callable securities typically offer higher yields with call protection over a fixed period. |
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- Rates are firm and do not change during the open order period, allowing investors to analyze their investment comfort that the bonds will be available. |
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- Once rates are posted, the order book generally remains open for the week, although the issuers do reserve the legal right to cancel or change offerings without notice. |
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- Each week's posting contains a variety of payment frequencies: typically monthly, quarterly, and semi-annually, allowing investors to tailor their portfolio around income stream requirements. |
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- Investors are likely to be familiar with the issuer and/or the products/services offered by the issuer. Customers invest with the knowledge that their principal and interest is backed by the full faith and credit of that issuer. |
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- CorporateNotes are designed as buy and hold investments. |
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- As with any fixed income investment, CorporateNotes are vulnerable to changes in interest rates and may be subject to a substantial gain or loss if not held to maturity. |
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- Credit risk is commensurate with the issuers' ratings. |
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- The issuers reserve the right to limit and/or restrict redemptions associated with the survivor's option. Customers are urged to read the prospectus for more information before investing. |
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