Ohio Treasurer Richard Cordray believes many state residents would be willing to invest in their state's infrastructure, so long as the bonds are safe and worth their while.
In Toledo yesterday, he touted the start of a Buckeye Savers Bond program that gives residents weary of the stock market and dwindling returns for bank savings a chance to buy into the $140 million in Ohio municipal bonds.
The return could be 4 percent, but it is tax-free, generating the equivalent of an additional 2 percent.
The money will be used to fund 16 highway capital improvement projects in the state, including a new I-475/Salisbury Road interchange in southern Lucas County.
"You can see right where your money's going and you can benefit from it," Mr. Cordray said.
The bonds, called highway capital improvement bonds, will be in one to 10-year terms and sold in increments of $5,000. They are top-rated by Fitch Ratings and Moody's Investor's Service and are available through a group of banks and brokers in the state.
Residents can buy them directly from the state Treasurer's office. A phone number, 1-800-228-1102, has been set up to provide information.
Bond orders will be taken starting Monday and lasting through Wednesday with retail orders given first priority. What is left to be sold will go to institutional investors.
Wallen "Buzz" Crane, senior vice president and resident manager of the Toledo and Sandusky offices of Smith Barney, said bonds are becoming popular, especially for investors with big tax liabilities.
"There is a certain percentage of people who are locked into the high tax bracket and they'll do anything to get a good return," Mr. Crane said.
"If you could buy a [certificate of deposit] today that went out five years, you could get a 3 or 4 percent return. But when you are including taxes, you're giving back 40 percent or more."
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