New Hampshire Bonds (New Hampshire Municipal Bonds)

 

 

New Hampshire bonds are issued by the State, through registered brokers or dealers for financing its development ventures. Although these third-party issuers are registered, they are not endorsed by the State Treasury. Establishments, other than the treasury, that are permitted to issue tax-exempt New Hampshire municipal bonds are:[br]

• New Hampshire Municipal Bond Bank

• New Hampshire Housing Finance Authority

• New Hampshire Health and Education Facilities Authority

• Business Finance Authority 

New Hampshire Bonds: Private Activity Bonds

Establishments, such as the New Hampshire Housing Finance Authority, are authorized to issue tax exempt private activity bonds to finance various developmental tasks. However, such issues are subject to certain restrictions. For instance, the housing authority is mandated to rent at least 30% of the housing units to households that earn lower than 50% of the median income in the area. This restriction is applicable for 15 years or the duration of the bond, whichever is greater.

 

These private activity New Hampshire bonds typically come with a ‘volume cap’ which is a ceiling on the amount of bonds that can be issued in a year. For instance, in 2008, the cap was 262.1 million on housing projects, with an extension of 96.6 million for additional housing.

 

New Hampshire Bonds: Issuance

New Hampshire General Obligation (GO) bonds are only issued after being authorized by the State legislature. These bonds are pledged by the ‘full faith and credit’ of New Hampshire State. GO bonds can be long-term or short-term, issued to municipal underwriting firms through bids. These firms, in turn, sell the bonds to individual as well as institutional investors.[br]

 

Since 1987, New Hampshire bonds have been mostly issued in denominations of $5,000, without any physical coupons or certificates. Bond transactions are documented in computerized book entries by the Depository Trust Company (DTC), which is a New York based company that is affiliated to the Federal Reserve System. Although individual bondholders are not presented any physical proof of their ownership, they can request for account statements from their New Hampshire bond brokers.

 

Most New Hampshire bonds are tax-free. They are considered a safe investment opportunity, having a decent credit rating by all three major rating agencies; which is Moody’s-Aa2, S&P-AA and Fitch-AA.