CHICAGO — Ohio next week will price $20 million of taxable revenue bonds backed by profits from the state’s liquor sales, a revenue source unscathed by the recession.

Proceeds from the bonds will finance investments in technology research by local businesses. The Innovation Ohio program is one of several state initiatives to create more jobs in the technology sector.

In 2008, the Legislature increased the amount of liquor-backed bonds the state can issue in expectation that debt issuance would increase as part of Gov. Ted Strickland’s $1.6 billion jobs program.

Loop Capital Markets LLC is senior manager and George K. Baum & Co. is co-senior. Public Financial Management Inc. is financial adviser and Climaco, Wilcox, Peca, Tarantino & Garofoli Co. is bond counsel.

The finance team will take retail orders on the bonds Tuesday. The institutional pricing is scheduled on Wednesday.

The bonds carry ratings of Aa2 from Moody’s Investors Service, AA-minus from Fitch Ratings, and AA from Standard & Poor’s. The bonds are secured by a senior-lien pledge of the Ohio State Liquor Enterprise’s net profits.

The debt consists of serial bonds that mature through 2029.

Ohio has a monopoly on state liquor sales, and it is one of the state’s most solidly growing revenue sources.

In fiscal 2009 the state reported gross sales of $745 million and a profit of $224 million, according to bond documents. That compares to sales of $581 million and profits of $156 million in 2004.

The state issues liquor profit-backed bonds under two laws, Chapter 166 and 151. Chapter 166 bonds are used for five economic development programs, including Innovation Ohio, and Chapter 151 bonds are subordinate bonds that finance brownfield revitalization projects.

The state has pledged to set liquor prices to provide at least 110% coverage of maximum annual debt service on all debt backed by the revenue source, according to Fitch.

After the issuance, Ohio will have $410.6 million of outstanding debt backed by liquor profits, according to bond documents.

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