Build America Bonds Market Strong

The American Recovery and Reinvestment Act of 2009 was signed into law on February 17, 2009 and allows for the issuance of a new class of municipal bonds: Build America Bonds
Allows governmental issuers to sell taxable debt until 2011 and receive a cash rebate from the U.S. Treasury equal to 35% of all interest paid for the term of the debt
Since the Treasury gave guidance in April 2009, Build America Bonds financings have proven to be heavily used by issuers
The BABs program has generated over $20 billion of issuance
16.6% of municipal bond issuance since mid April
Includes issuers from 34 states
Taxable investors are seeking exposure to municipal credit, which has caused a substantial decline in BABs credit spreads

National Association of State Auditors, Comptrollers and Tr.ppt

CS18_Rush.ppt

Morgan Stanley was in the market earlier this month with two sizable BAB financings for:
$400 million Dulles Toll Road (Book-running Senior Manager)
$825 million North Texas Tollway (Co-manager on BABs and Bookrunner on Tax-Exempt Bonds))
BAB financings have been done by almost every category of Section 103 issuers
While limited as to use (no refunding and no working capital financings), BABs have been instrumental in providing low cost financing for many important infrastructure projects

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