The average underwriting fees for Build America Bonds are $8.20 per $1,000, whereas the standard fee for tax-exempt issues is $5 to $6 per $1,000. Since the program’s inception in April 2009, $78 billion worth of BABs have been sold. Bankers estimate that s much as $150 billion more of the bonds will be sold – over one-third of the muni bond market – by the end of the year.
The Obama administration wants to make the program permanent, but they will scale back the subsidy to 28%. Naysayers of the program argue that money is being funneled from from American taxpayers directly to Wall Street banks.
For more information on municipal bonds, visit our municipal bonds category.
Max Chen contributed to this article.
