Michigan Bonds (Michigan Municipal Bonds)

By: EconomyWatch Content   Date: 6 November 2009

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Michigan bonds (Michigan Municipal Bonds) offer tax-free income to investors. You can invest in a variety of revenue, general obligation and other Michigan municipal bonds. The objective of issuing these bonds is to provide low cost capital financing to various governmental entities.

 

Even the University of Michigan issues low risk bonds. This is apparent in the ‘AAA’ rating that it received from both Standard & Poor's and Moody's Investors Service, in 2009. Moreover, the university has been able to maintain this rating for a long time. This leads to increase in the confidence of investors.

 

Michigan Bonds (Michigan Municipal Bonds) Authority

The Michigan Municipal Bond Authority was formed in 1985 under the Shared Credit Rating Act, Public Act 227. The authority aims at assisting local schools and government units obtain funds for infrastructure projects through an alternative source. It also enables these units to obtain cash by providing them access to the public finance market at lower cost.

 

The following is the list of eligible borrowers:

  • Commissions and Authorities
  • Public Colleges & Universities
  • Community Colleges
  • Public School Districts
  • Villages
  • Townships
  • Cities
  • Counties
  • Fire Protection,
  • Libraries,
  • Parks and Recreation
  • Other Special Purpose units

 

The financing programs of the authority are based on the pooling of local government loans. The authority provides loans to municipal borrowers by selling a similar amount of debt in the public finance market at national and regional level. When these borrowers repay the debt, the bond holders are also paid back their money by the authority. Every borrower is responsible for the loan it has taken and pays the costs of issuance in proportion.

 

The following are some popular Michigan municipal bonds:

  • Northville Michigan Charter Township Taxable Series B-build America Bds; Coupon/Interest Rate: 6.066% and Maturity Date: 2023-04-01
  • Wyandotte Michigan City School District Refunding; Coupon/Interest Rate: 4.000% and           Maturity Date: 2015-05-01
  • Wayne Charter County Michigan Airport Detroit Metropolitan Wayne County Airport B; Coupon/Interest Rate: 5.000% and Maturity Date: 2013-12-01
  • Oakland County Michigan George W Kuhn Drainage District Series E; Coupon/Interest Rate: 5.200% and Maturity Date: 2022-04-01
  • Dickinson County Michigan Economic Refunding International Paper Company Project Series A; Coupon/Interest Rate: 5.750% and Maturity Date: 2016-06-01

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