What are the primary purposes of the Preliminary Official Statement (POS)?

The primary purposes of the Preliminary Official Statement (POS) are to inform investors and outline the security features of a bond issue. This document serves as a critical communication tool between issuers and potential investors. It provides essential details about the bond offering, including the terms of the bonds, the security for the bonds, and any relevant financial and demographic information about the issuing entity.

By informing investors, the POS plays a vital role in ensuring that those considering purchasing the bonds have access to all necessary information to make an informed decision. It typically includes details about the use of the bond proceeds, the financial health of the issuer, and risks associated with the investment. The transparency offered by a well-prepared POS can enhance the credibility of the issuer and help in the successful placement of the bonds in the market.

The focus on investor information and bond security aligns with the overarching goal of promoting honest and transparent financial practices in public finance. This transparency is crucial in building trust and ensuring that investors can accurately assess the risks and benefits associated with the bond offering.