build america bonds

Illinois Tollway this week sold $500m of the Build America Bonds created by the US Government as part of economic "stimulus" efforts. They were 15 and 25 year maturities and were issued at 5.293% for the 2024 securities and 6.184% for the 2035 securities.

Allowing for the standard US BAB subsidy of 35% of interest costs these work out as costing the Tollway 3.44% and 4.02%.

Diane Gutierrez-Scaccetti executive director at the New Jersey Turnpike Authority says that following a successful sale of an enormous $1,750m in 30 year bonds in recent days the Turnpike's big capital program is fully financed through the middle of 2010. $1375m of the bonds classified as Build America Bonds (BABs) are taxable bonds 35% subsidized by the US Government as part of the stimulus program, the other $375m were traditional municipal bonds.