Build America Bonds save state, local governments $12B
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Other entities used the bonding funds for hospital and nursing home improvements, recreational facility improvements, utility improvements and higher education improvements.
The Build America Bonds program allows state and local governments to obtain financing at a lower borrowing cost compared to issuing tax-exempt debt. Under the program, the U.S. Treasury Department makes a direct payment to the government issuer in an amount equal to 35 percent of the interest payment on the bonds. Since the program began in April of last year, there have been more than 1,000 BAB issuances nationwide through the end of March of this year. Those issuances were in 48 states for a total of more than $90 billion. The net savings to those entities totals $12.3 billion in borrowing costs compared to issuing tax-exempt bonds. To view the complete list of entities by state issuing BABs and what they are to be used for, click here and look under "Recent Reports."
