The Claymore/Guggenheim Build America Bonds Trust, Series 1 ("Trust") seeks to provide a high level of current income and to preserve capital by investing in a portfolio of long-term investment-grade taxable municipal bonds that are principally Build America Bonds.
Past performance is no guarantee of future results. Investment returns and principal value will fluctuate with changes in market conditions. Investors' units, when redeemed, may be worth more or less than their original cost.
This information does not constitute an offer to sell or a solicitation of any offer to buy: nor shall there be any sale of these securities in any state where the offer, solicitation, or sale is not permitted.
Principal Investment StrategyAs of the initial date of deposit, the Trust will invest in a portfolio of taxable municipal bonds, of which at least 80% of its assets will be invested in Build America Bonds. The Sponsor will select bonds that it believes have the best chance to meet the Trust’s investment objective over its life. With the signing into law of the American Recovery and Reinvestment Act of 2009 (the “Recovery Act”), an entirely new type of taxable municipal bond was created—Build America Bonds. Build America Bonds are largely similar to traditional tax-exempt municipal bonds except that the interest is taxable at the federal, and possibly state and local, levels and they provide a government subsidy feature to the issuer. The federal government reimburses the municipality for 35% (45% in the case of certain bonds) of the interest paid on Build America Bonds issued through 2010. More specifically, a Build America Bond is defined as any obligation (other than a private activity bond) if (i) the interest on such obligation would, but for the new provisions, be excludable from gross income under Section 103 of the Internal Revenue Code, (ii) such obligation is issued before January 1, 2011 and (iii) the issuer makes an irrevocable election to have the new tax credit provision apply. The subsidy provided by the government will allow issuers to offer higher interest rates on bonds than they do on their taxfree debt, while offsetting some or all of the additional financing burden. The available subsidy for any applicable bond in the portfolio will be paid to the bond issuers only; neither the Trust nor unitholders will be entitled to a tax credit. Municipal bonds are debt instruments issued by state and local governments to raise money for various public works projects such as highways, airports and schools. As of the Trust’s initial date of deposit (the “Inception Date”), all of the bonds in the portfolio were rated investment-grade quality by at least one of the following ratings agencies: Standard & Poor’s, a division of The McGraw- Hill Companies, Inc. (“Standard & Poor’s”) or Moody’s Investors Service (“Moody’s”). Such ratings relate to the underlying bonds and not the units of the Trust. After the Inception Date, a bond’s rating may be lowered. Investment-grade bonds are bonds that are rated at least in the category of BBB by Standard & Poor’s or Baa by Moody’s. A rating in the category of BBB or Baa is the lowest possible investment-grade rating. See “Description of Bond Ratings” for details. Certain bonds in the Trust may be covered by insurance policies obtained from municipal bond insurers identified in “Trust Portfolio,” which guarantee payment of principal and interest on the bonds when due. As a result of such insurance, the insured bonds have received ratings that may reflect the creditworthiness of the bond issuer. Please note that the insurance relates only to the insured bonds in the Trust and not to the units or the market value of the bonds or of the units. The Trust intends to pay interest distributions each month and expects to prorate the interest distributed on an annual basis; see “Distributions.” The record dates and distribution dates for principal and interest distribution dates are the 15th and 25th of each month, respectively. Furthermore, investors may receive principal distributions from bonds being called or sold prior to their maturity or as bonds mature. The Sponsor has selected Guggenheim Partners Investment Management, LLC ("GPIM"), a wholly-owned subsidiary of Guggenheim Partners, LLC, to assist the Sponsor with the selection of the Trust’s portfolio. |
Selection CriteriaThe Sponsor considered the following factors, among others, in selecting the bonds:
Guggenheim Partners Investment Management, LLC (GPIM) Guggenheim Partners Investment Management, LLC, is a subsidiary of Guggenheim Partners, LLC and an affiliate of the Sponsor which offers financial services expertise within its asset management, investment advisory, capital markets, institutional finance and merchant banking business lines. Clients consist of an elite mix of individuals, family offices, endowments, foundations, insurance companies, pension plans and other institutions that together have entrusted the firm with supervision of more than $100 billion in assets. A global diversified financial services firm, Guggenheim Partners, LLC office locations include New York, Chicago, Los Angeles, Miami, Boston, Philadelphia, St. Louis, Houston, London, Dublin, Geneva, Hong Kong, Singapore, Mumbai and Dubai. The Sponsor is also a subsidiary of Guggenheim Partners, LLC. See “General Information” for additional information. |
Risks and Other ConsiderationsAs with all investments, you may lose some or all of your investment in the Trust. The value of the units and the bonds held in the portfolio can each decline in value. Units of the Trust are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Trust also might not perform as well as you expect. This can happen for reasons such as these:
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Please see the Trust prospectus for more complete risk information.
Unit Investment Trusts are fixed, not actively managed and should be considered as part of a long-term strategy. Investors should consider their ability to invest in successive portfolios, if available, at the applicable sales charge. UITs are subject to annual fund operating expenses in addition to the sales charge. Investors should consult an attorney or tax advisor regarding tax consequences associated with an investment from one series to the next, if available, and with the purchase or sale of units. Guggenheim Funds Distributors, LLC does not offer tax advice.
Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.
Investing involves risk, including the possible loss of principal.
Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Japan Limited, and GS GAMMA Advisors, LLC. Securities offered through Guggenheim Funds Distributors, LLC.
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• Not FDIC Insured • No Bank Guarantee • May Lose Value
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