Understanding State of Ohio Municipal Bonds Market

The State of Ohio municipal bonds market is a significant player in the world of fixed-income investments. The state's large and diverse economy, which includes major industries like healthcare, education, and manufacturing, provides a stable foundation for municipal bond issuances.

Ohio's municipal bonds are backed by the state's strong credit rating, which is currently rated AA+ by Standard & Poor's. This high rating indicates that the state has a low risk of default.

The state's largest issuers of municipal bonds are its cities and counties, which use the funds to finance infrastructure projects, such as roads, bridges, and public buildings. In fact, according to the Ohio Municipal Bond Advisory Commission, the state's cities and counties issued over $10 billion in municipal bonds in 2020 alone.

Ohio's municipal bonds are also attractive to investors due to their tax-exempt status. This means that investors who purchase Ohio municipal bonds do not have to pay federal or state income taxes on the interest earned.

Ohio municipal bonds offer a range of benefits that make them an attractive option for investors.

One of the key advantages is the longer loan terms, which can extend up to 30 years based on the useful life of the assets financed, such as public infrastructure.

This extended loan term can provide more stability and predictability for organizations, allowing them to plan for the long-term.

With fixed interest rates, you can rest assured that your interest rate will remain the same for the term of the issue, based on tax-exempt or taxable bond rates at the time the bonds are sold.

Here's a breakdown of the loan terms you can expect:

The state of Ohio municipal bonds offer a unique investment opportunity for those looking to earn current interest income while minimizing tax liabilities.

Investors can expect a high level of current interest income exempt from regular federal, Ohio State, and in some cases, Ohio local income taxes.

The investment strategy prioritizes preservation of capital, ensuring that returns are consistent with this goal.

Under normal market conditions, the fund invests at least 80% of its net assets in investment grade municipal bonds rated BBB/Baa or higher.

Below investment grade municipal bonds, also known as "high yield" or "junk" bonds, can make up up to 20% of the fund's net assets.