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Learn about Ohio Public Facilities Commission, including Featured News.
The Ohio Public Facilities Commission (OPFC) issues general obligation bonds for common schools, higher education, natural resources, coal research and development, conservation projects, local infrastructure improvements, Third Frontier research and development, job-ready site development, and veterans' compensation. Each of these currently authorized programs is described below.
Common Schools - A 1999 constitutional amendment authorizes general obligation debt to be issued to pay the costs of capital facilities for a system of common public schools throughout the state. There is no constitutional limit on the amount of debt that can be outstanding at any time. The full faith and credit, revenue (including net state lottery proceeds, if pledged) and taxing power (excluding highway user receipts) of the state are pledged to retire this debt.
Higher Education - A 1999 constitutional amendment authorizes general obligation debt to be issued to pay the cost of capital facilities for state-supported and state-assisted institutions of higher education. There is no constitutional limit on the amount of debt that can be outstanding at any time. The full faith and credit, revenue (including net state lottery proceeds, if pledged) and taxing power (excluding highway user receipts) of the state are pledged to retire this debt.
Natural Resources - A 1993 constitutional amendment authorizes $200 million of general obligation debt to be issued to finance capital facilities for parks and natural resources improvements. Additional debt may be issued as outstanding debt is retired, provided that no more than $200 million is outstanding at any time. Not more than $50 million may be issued in any fiscal year. The full faith and credit, revenue (excluding net state lottery proceeds), and taxing power (excluding highway user receipts) of the state are pledged to retire this debt.
Coal Research and Development - A 1985 constitutional amendment authorizes $100 million of general obligation debt to be issued to finance grants, loans, or loan guarantees for research and development of coal technology that will encourage the use of Ohio coal. Funding is available to any individual, association, or corporation doing business, or to any educational or scientific institution located in the state. Additional debt may be issued as outstanding debt is retired, provided that not more than $100 million is outstanding at any time.
Conservation - Constitutional amendments in 2008 and 2000 authorize $400 million of general obligation debt to be issued to finance preservation of green space, development of recreational trails and protection of farmland, all through partnerships with local governments. Not more than $50 million may be issued in any fiscal year. Additional debt may be issued as outstanding debt is retired, provided that not more than $400 million is outstanding at any time.
Infrastructure Improvements - A 2014 constitutional amendment authorizes $1.875 billion of general obligation debt as a 10-year extension of this program to finance public infrastructure capital improvements of municipal corporations, counties, townships, and other local government entities, with an annual issuance limit of $175 million in the first five years increasing to $200 million in the second five-years. This extension followed a prior 10-year extension passed in 2005 which authorized an additional $1.35 billion of general obligation debt. Additionally, there were two prior debt authorizations for this purpose (passed in 1985 and 1995) that each authorized $1.2 billion in debt.
Job-Ready Site Development - A 2005 constitutional amendment authorizes the issuance of $150 million of general obligation debt for the development of sites for industry, commerce, distribution, and research and development. Not more than $30 million was permitted to be issued in each of the first three fiscal years and not more than $15 million in any other fiscal year.
Third Frontier Research and Development - Constitutional amendments in 2010 and 2005 authorize the issuance of $1.2 billion of general obligation debt in support of Ohio industry, commerce and business. No more than $450 million total may be issued in state fiscal years 2006 through 2011, no more than $225 million in fiscal year 2012 and no more than $175 million in any fiscal year thereafter.
Veterans' Compensation - A 2009 constitutional amendment authorized the issuance of state general obligation debt to provide compensation to persons who have served in active duty in the United States armed forces at any time during the Persian Gulf, Afghanistan, and Iraq conflicts. Not more than $200 million may be issued and no obligations may be issued later than December 31, 2013.
Ohio Office of Budget and Management (OBM) Director Kimberly Murnieks announced the Ohio Public Facilities Commission closed on the refinancing of $185 million of outstanding general obligation debt, achieved $38 million in cash flow savings, and reduced interest costs to 1.22 percent from 4 percent.
The “refunding” bonds for debt originally issued in 2012 benefited from a historically low interest rate environment, sizable investor demand, and Ohio’ strong (AA+/Aa1/AA+) General Obligation credit ratings, which gained momentum earlier this summer when Fitch Ratings elevated the State’s rating outlook from “Stable” to “Positive.”
On a cumulative basis for the calendar year, OBM’s debt savings initiatives will save the General Revenue Fund (GRF) $260 million in cash flow in future fiscal years.
“I’m proud that our efforts have saved Ohio tax dollars this year and into the future. We achieved these results due to the State’s strong economic recovery, our ability to pay off some debt early, and our high-quality credit rating. Ohio is well-managed with strong leadership and conservative fiscal practices and investors notice – our fall transaction was five times oversubscribed”, said OBM Director Kimberly Murnieks.
Pricing alongside the refunding bonds, the OPFC sold $181.2 million of “new money” Infrastructure and Conservation bonds at an all-in interest rate of 2.02 percent.
The infrastructure sale supports grants and loans to local governments for investment in roads, bridges, and water and sewer systems. Proceeds from the sale of Conservation bonds, are utilized for green space preservation, recreational trails at Ohio’s state parks, and to protect and preserve farmland.
Citigroup served as senior managing underwriter along with KeyBanc Capital Markets as designated co-senior manager. PFM Financial Advisors LLC. provided financial advisory services.
Governor DeWine serves as chairperson of the OPFC while the OBM director serves as secretary. Additional members include representatives from the Treasurer of State, Auditor of State, Secretary of State, and Attorney General.
OBM Announces Robust Monthly Preliminary Revenue Data
(COLUMBUS, Ohio) – Office of Budget and Management (OBM) Director Kimberly Murnieks announced today that Fitch Ratings, citing the state’s superior financial resilience, affirmed the state’s Issuer Default Rating (IDR) at “AA+” and elevated the state’s outlook to Positive from Stable. The “AA+” rated (Positive) outlook indicates the state’s low default risk and is one notch below Fitch’s highest credit quality rating of “AAA.”
“Fitch’s decision to upgrade Ohio’s bond rating outlook to Positive is proof that the state of Ohio’s financial management is solid and our economy is surging forward. We took the hard and necessary steps to do what is right for Ohioans, and for our communities. And we are seeing results. Ohio is the first, and so far the only, ‘AA+’ rated state to have its outlook elevated to Positive by one of the three major ratings agencies since the pandemic began,” said Ohio Governor Mike DeWine. “Ohio is the best state to grow your career, to expand your business or to start a new one, and to raise a family.”
“An improved bond rating outlook is a message that Ohio is managed well, it is a great place to invest and has a bright future,” said Ohio Lt. Governor Jon Husted. “It’s just another piece of evidence that Ohio and the Ohio economy are strong as we emerge from the pandemic and prepare for the future.”
“This rating outlook change is strong third-party validation of Ohio’s robust financial position and of Governor Mike DeWine’s proactive management of the state’s finances and economy throughout the turbulent global conditions caused by the pandemic. The decisive actions taken by Governor DeWine starting in February of 2020 to protect Ohioans and control state government spending, prioritizing saving lives to save our economy, worked,” said OBM Director Murnieks.
The Fitch report states, “Outlook revision to Positive from Stable reflects Ohio’s sustained trend of balanced finances and growth in reserves that strengthens the state's financial resilience as it confronts cyclical economic and revenue trends.” The report further cites Ohio’s “superior financial resilience that allowed it to absorb the immediate budgetary effects of the economic downturn.”
The rating action is Fitch’s first change in 11 years when Ohio’s IDR was upgraded from “AA” to “AA+” in 2010. This action represents the highest rating level for Ohio’s IDR by any of the three main rating agencies since 1979.
In connection with the IDR update, Fitch also rated an upcoming issuance of $56.5 million State of Ohio (Treasurer of State) Series 2021A Capital Facilities Lease-Appropriation Bonds (Cultural and Sports Facilities Building Fund Projects) as “AA” Positive outlook and affirmed the ratings and revised outlooks to Positive on Ohio’s “AA+” General Obligation bond rating, “AA” on outstanding appropriation-backed bonds, the “AA” Ohio School District Credit Enhancement Program Rating, and the “A+” PPP Grantor Counterparty rating assigned to the Ohio Department of Transportation's Portsmouth Bypass project payment obligations.
The Fitch report citing Ohio’s superior financial resilience is available here.
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Ohio Office of Budget and Management (OBM) Director Kimberly Murnieks announced that the Ohio Public Facilities Commission (OPFC) in partnership with OBM’s Capital Markets Team completed the sale of $597 million of Common Schools and Higher Education bonds.
The sale supports capital projects at K-12 schools, colleges and universities around Ohio. The transaction included a $148 million refinancing of debt issued in 2011 and 2013 and will produce $46 million of cash flow savings between fiscal years 2021 and 2033.
The sale priced with an all-in-interest rate of 2.02% and the State achieved attractive pricing as a result of its strong credit ratings (AA+/Aa1/AA+), sizable investor demand generating 5 times more orders than supply, and a low rate environment.
Bank of America Securities served as senior managing underwriter with Loop Capital Markets serving as co-senior manager. Acacia Financial Group, Inc provided Financial Advisory services.
“This spring deal accelerates our year of recovery, which allows for additional support to Ohio’s communities and economy. On behalf of Governor Mike DeWine, OPFC, and OBM, we have achieved measurable results in the marketplace,” said OBM Director Kimberly Murnieks.
Governor DeWine serves as Chairperson of the OPFC while the OBM Director serves as Secretary. Additional members include representatives from the Treasurer of State, Auditor of State, Secretary of State, and Attorney General.