"Tax-exempt" means the interest that an Oregon investor earns on a bond is exempt from both federal income taxes and State personal income taxes. The interest paid on all State of Oregon bonds is exempt from State of Oregon personal income tax, but not all State of Oregon bonds are exempt from federal income tax. The bonds that are taxable under the federal tax code are clearly identified as "Taxable" bonds in the official statement. See "What is a taxable bond" below. For additional information about the tax status of specific bonds, read the "Tax Matters" section of the official statement of a particular bond offering. Official statements may be obtained from your broker, by visiting www.Buyoregonbonds.com, or by calling the Debt Management Division at (503) 378-4930.

Given the nature of some of the programs funded by State of Oregon bonds, the interest on certain bonds may not meet the Federal tax rules to qualify for exemption from federal income taxes. Please read the "Tax Matters" section of the official statement for the bond sale to learn about the bonds' tax status. Official statements may be obtained from your broker, by visiting www.Buyoregonbonds.com, or by calling the Debt Management Division at (503) 378-4930.

Municipal bonds may be an important part of a diversified investment portfolio, as municipal bonds typically have a predictable stream of payments of principal and interest. Investors often purchase municipal bonds to preserve and increase capital, or to receive dependable interest income. Additionally, since the interest earned on municipal bonds is typically exempt from federal and state income taxes high tax bracket bond owners may receive higher after tax yields than on taxable bonds.

When an investor buys a GO bond issued by the State of Oregon, the investor is making a loan to the State. GO bonds are backed by the full faith and credit of the State of Oregon. The State uses the money borrowed for a variety of purposes including building college and university classrooms and dorms, funding veteran's mortgages and financing small scale energy projects.

COPs are a financial obligation the State uses to finance essential public improvements, including state prisons and office buildings, state universities, and other critical public safety projects. Like a GO bond, a COP is, in effect, a loan from investors to the State. Unlike GO bonds, however, COPs are not backed by the full faith and credit of the State; rather, the repayment of the debt service on the COPs is subject to annual appropriation by the Legislature.

Revenue bonds are a form of long-term borrowing State agencies use to finance State programs and projects that are self-supporting through various non-General Fund revenues. Examples include the revenue bonds issued for a first-time homebuyers' mortgage program, highway construction and bridge projects. Most often the income generated by the program or project goes toward meeting debt service on the bonds (i.e., paying principal and interest to bondholders). Unlike GO bonds, revenue bonds are not backed by the State's full faith and credit, but rather through the revenues pledged to bondholders.

The State of Oregon 's General Obligation Bonds, are rated AA, Aa2, and AA by Fitch Ratings, Moody's Investors Service, and Standard & Poor's respectively. Other State of Oregon bond types may have different credit ratings. Please see the Calendar of Oregon Bond Sales, or the Official Statement for the current ratings for a particular State of Oregon bond offering.

Generally, the safety of a series of municipal bonds is measured by its credit ratings. For example, the State of Oregon's General Obligation bonds have relatively high credit ratings, reflecting the State's strong financial management and the fact that these bonds are backed by the full faith and credit pledge of the State of Oregon. The State of Oregon has never defaulted on any bond that it has pledged to repay from State moneys. Click here for a table of historical default rates on all municipal bonds.

The yields vary from bond sale to bond sale, and depends on the maturity of the bond that you own, the credit rating and other factors described elsewhere. For specific information regarding yields, please contact your broker.

Most municipal securities may be sold prior to maturity through a brokerage firm. If an investor sells a municipal security prior to maturity, the price that investor will receive depends on current market interest rates, supply relative to demand, perceived credit quality of the securities, as well as other variables. Investors should also consult a tax advisor for any tax implications.

When the State sells a bond, it is referred to as a new issue primary market sale. In a new issue, all of the terms are set, including the price and interest rates, and the securities are sold to investors, with the issuer receiving the proceeds of the sale. The initial sales commission paid to broker-dealers is paid by the issuer, such as the State of Oregon, from the proceeds. A retail investor who would like to participate in a primary market transaction must have an account with a brokerage firm serving as a manager or selling group member for the sale. A secondary market transaction does not involve the State, but is a transaction between two investors, both a buyer and a seller. These transactions involve a brokerage firm which acts either as a liaison between the buyer and seller, or as a buyer or seller itself. Buyers pay sales commissions to brokerage firms to compensate them for their services in facilitating the transaction. Current market interest rates, supply relative to demand, perceived credit quality of the securities, as well as other variables, influence the price of the bonds.

No firm is guaranteed to have bonds available from a particular sale. If investor demand is high other bond purchasers may be "filled" (receive their bond orders) prior to your order. To improve your chances of being filled for a bond order let your broker know early of your interest and willingness to purchase a bond.

Information is available at the Calendar of Oregon Bond Sales, on the Buyoregonbonds.com website.

Please visit the Debt Management Division's website. Please note that while the Office of the State Treasurer Debt Management Division tracks most Oregon local government bond sales, specific information is best obtained through your broker. The State does not manage local government bond sales.