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Build America Bonds at work in Arizona
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The U.S. Department of Treasury's Build America Bonds program provides funding for state and local governments at lower borrowing costs for community projects projects such as construction of schools and hospitals, development of transportation infrastructure, and water and sewer upgrades.
This program is intended to improve the conditions for an economic recovery at the state and local level. The Build America Bonds program will help states and local governments finance building, and supports the construction of schools, hospitals, roads, and environmental projects, and helping communities build a foundation for a stronger economic future.
Under the program, the Treasury makes a direct payment to the state or local governmental issuer in an amount equal to 35 percent of the interest payment on the bond. These bonds are designed to appeal to a broader set of investors than traditional tax-exempt bonds. Potential investors include pension funds that traditionally do not hold tax exempt bonds and foreign investors. These investors have been important additions to the market for municipal debt.
Early market reception for Build America Bonds has been very positive. Since the program was launched on April 3, 2009: There has been $17.4 billion in Build America Bond issuance; Build America Bonds constitute about 16.6 percent of municipal bonds issuances since mid April; and a total of 34 states are participating in the program, with a total of 178 separate issues.
Here’s an update on the Build America Bonds in use in Arizona to date:
Arizona -- 6 issues as of 7/17/09 totaling $175 million | |||
Issue Date | Issuer | Purpose | Amount ($Millions) |
5/7/2009 | Mesa Utility System | Multiple Utility Improvements | 60 |
5/29/2009 | Maricopa County School District No. 028 (Kyrene Elementary) | School Improvements | 24 |
6/3/2009 | Miaricopa County Union School District No. 097 (Deer Valley) | School Improvements | 17 |
6/23/2009 | Black Hawk County | Public Improvements | 26 |
6/24/2009 | Coconino & Yavapai Counties- Joint Union School District No. 9 Sedona | School Improvements | 18 |
7/7/2009 | City of Avondale | Public and Sewer Improvements | 30 |
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