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Abstract: 

The Build America Bond ( BAB) program was enacted as part of the American Recovery and Reinvestment Act (ARRA). BABs are taxable bonds that carry a 35% interest cost reimbursement by the federal government. BAB issuance quickly became an important part of the municipal market in 2009, with over $64 billion sold from April through December. This article describes how BABs fi t into the overall municipal market, examines the fi rst calendar year of issuance, and discusses some future implications of the program.

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Affiliations:  1: Department of Public Policy, University of Connecticut; 2: Department of Public Policy, University of Connecticut.