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State "munis': a weekly guide for investors

"Florida Municipal Bond Update" makes its debut today as a weekly feature in Monday Business.

Municipal bonds are sold to investors as a way to pay for many state and local government projects such as building roads and schools. Some bonds are backed by a government body's taxing power and some only by the pledging of revenues from a particular source, such as city utility bills. Many are insured against default by a private insurance company.

Florida investors long have had a strong interest in municipals _ or "munis" as they are sometimes called _ because the interest payments are exempt from federal income tax. However, in recent years, more investors have been specializing in bonds issued close to home. That is partly because more mutual fund companies are launching Florida bond funds and marketing them heavily and partly because investors want to avoid the state's intangible tax, which applies to out-of-state munis, but not to those issued in Florida.

The strong demand for Florida bonds means their yields tend to be slightly lower than the national averages for municipals, said Greg Ghodsi of J. B. Hanauer & Co., a municipal bond dealer in Tampa that will supply the information for the weekly update.

One of the regular features will be average yields on AAA-rated Florida bonds of six different maturities. The update will include a list of Florida bonds expected to come to market that week.

Investors interested in buying individual municipal bonds may purchase them through dealers that specialize in this investment or through brokerage firms. The availability of particular bonds will vary. Prices of municipal bonds rise and fall with interest rates and in response to other factors, such as changes in income tax rates or changes in the credit rating of the issuer.

The weekly update sometimes will include Florida issues that recently have been called for redemption.

It is important for an investor to present these bonds for redemption because the issuer will stop paying interest.

As part of this move, "The Week Ahead" box, which lists national economic events scheduled for the coming week, will be moved to run with the Calendar listing, also in Monday Business.

Florida municipal bond update

Yields

as of June 18 (AAA insured):

1 year 2.60%

5 year 4.15%

10 year 4.85%

15 year 5.25%

20 year 5.55%

30 year 5.60%

Redemption calls:

_ Jacksonville Electric Authority revenue bonds, series 1, 1982 A, due 2005;

_ Pompano Beach water system revenue bonds, series 1982, dated April 1, 1983, due 1994 to 2001;

_ Monroe County refunding improvement revenue bonds, series 1983, dated June 1, 1983, due 1994 to 2011;

_ Alachua County industrial development revenue bonds, Driltech project, series 1979, due 1999

New issues likely this week:

_ $92-million Greater Orlando Aviation Authority

Source: J.B. Hanauer & Co., Tampa

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