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Ohio Sells $117 Mln in Highway Bonds

By Munichain News Desk

Ohio issued $116.8 million in bonds to fund capital improvements to its highways.

The bonds mature between 2025 and 2039, yielding between 3.1% and 3.75%. They pay interest at 5%. The securities received a rating of Aa1 from Moody’s Investors Service, AAA from Fitch Ratings, AAA from S&P Global Ratings, and AAA from Kroll Bond Rating Agency.

The rating reflects “the state’s high level of financial resilience and superior budget management,” Fitch analysts wrote. “Ohio’s sustained trend of balanced budgets, coupled with its growing fiscal reserves and cash, supports robust gap-closing capacity,” they added.

Ohio maintains an extensive network of highways, but the state’s roads have fallen into a state of disrepair. Each Ohio driver pays an average of $506 per year in costs due to driving on roads in need of repair, and commute times have increased by 5.7% since 2011, according to the U.S. Department of Transportation.

The American Society of Civil Engineers (ASCE), an industry group, gave the state’s roads a ‘D’ rating in its 2021 report card. Congestion causes Ohio drivers $4.7 billion annually in lost time and wasted fuel, according to ASCE. 

But things could be turning around for the almost 5,000 miles of Ohio highways in poor condition. The 2021 Infrastructure Investment and Jobs Act paved the way for almost $10 billion in federal funding for Ohio highways and bridges over the next five years. Highway bond programs will supplement that funding.

The bonds are general obligations of the state, backed by its full faith and credit excluding lottery proceeds. The bonds are also supported by some highway toll revenue.

Loop Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for $128 million. The price reflected a premium of more than $11 million.

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