InterNotesSM Corporate Bond Offerings: FAQs

Why InterNotes?

Weekly offering of InterNotes provide individual investors the opportunity to buy fixed income securities directly from the issuer through WR Hambrecht + Co. Typically, individuals obtain their bonds in the secondary market, where securities are bought and sold after their original issuance. Buying new issues of InterNotes simplifies the purchasing decision, with no premium or discount pricing, no accrued interest, and a fixed price during a week’s offering period.

How are InterNotes priced?

New issue InterNotes are priced for purchase at par – typically $1,000 per bond, and in increments of $1,000. Occasionally a “baby bond” with a par value of less than $1000 will be offered. Check the prospectus for specific terms.

What is the yield on InterNotes?

When at par, the yield on a purchase of semi-annual InterNotes will be the stated coupon rate. The bond equivalent yield on monthly or quarterly pay InterNotes will be slightly higher than the stated coupon rate.

What maturities are offered?

InterNotes are issued in a wide range of maturities. Weekly updates are available through this Web site.

Will there be a bond certificate?

No. InterNotes are issued on a book-entry basis only. Ownership of InterNotes is evidenced on your brokerage statement.

How do I purchase InterNotes?

By calling WR Hambrecht + Co Customer Service at 1-800-673-6476.

When Do I Get My Interest Payment?

Interest and principal payments on InterNotes are typically made on the 15th of the month. If you purchase a monthly pay note your first coupon payment will be the next calendar month on the 15th. If you purchase a semi-annual note, your first coupon payment will be on the 15th of the sixth month following the month of purchase. InterNotes mature on the 15th of the month of the stated maturity, or check provisions for callable InterNotes.

Are InterNotes callable?

InterNotes may be callable or non-callable.

What does ‘callable’ mean?

With callable InterNotes, the issuer has the right, but not the obligation, to return the investor’s principal prior to the maturity date. Callable InterNotes are callable by the issuer at a specified future date for a specified future price. See the prospectus of each issuer of InterNotes for more detailed information on the features of callable InterNotes.

Can I sell my InterNotes?

InterNotes should generally be held to maturity and are not appropriate for investors who will need liquidity prior to maturity. While certain dealers currently intend to provide for secondary trading of InterNotes, there can be no assurance that such a market will be maintained.

Where can I get a prospectus?

The prospectus of each issuer of InterNotes can be downloaded via the Web, on the current InterNotes Corporate Bond Offerings page.

What is the survivor’s option?

The survivor’s option is a feature of InterNotes which allows the holder’s estate to return (or “put”) the bonds back to the issuer at par. In the event of death, with some restrictions and limitations, this feature is at the option of the estate. Investors are urged to read the prospectus of each InterNotes issuer for more complete disclosure.