Tax-Exempt Debt

Tax-exempt debt provides a lower cost of interest for qualified borrowers

The Port as a Conduit Issuer for Tax-Exempt Debt

Governmental, nonprofit (501c3), qualified “private activity” and “exempt facilities” can be financed with tax-exempt bonds.
The Port is a frequent issuer of tax-exempt conduit debt and has completed transactions for 3CDC, the Cincinnati Zoo, and various private schools.

Benefits of Tax-Exempt Debt

The principal advantage of tax-exempt debt is the lower cost of interest. Investors in tax-exempt bonds do not pay federal income tax on interest payments received on the bonds. These investors are willing to accept an interest rate lower than the interest rate on comparable taxable bonds. Some states exempt the interest on tax-exempt bonds from state income taxes, thus magnifying the benefit of tax-exempt financing.

Types of Tax-Exempt Bonds

There are many forms of conduit tax-exempt debt. The most common in this market are: 501(c)(3) Bonds, Industrial Development Bonds (also known as Small Issue Manufacturing Bonds), and Exempt Facility Bonds. All of these bonds require a “State or Local” government issuer to issue the bonds.


84.51 Building Parking Garage

The Port issued tax-exempt and taxable bonds to support the 1,000-car public garage portion of the 84.51 development.

8451 Corner View - web

Role of The Port

The Port is an economic development agency that initiates projects to stimulate growth and increase property values throughout Hamilton County. As a quasi-governmental agency, The Port is an eligible issuer of conduit tax-exempt bonds. Within these deals, The Port acts as a conduit and assumes no responsibility to repay bonds from its funds. The Port is deeply committed to bringing its relationships, tools and expertise to benefit the project / owner, and regularly works with the relationship bank and other members of the project team to achieve the best structure possible.