Bond Education | Glossary
Build America Bonds
Bonds issued by state and local governments as federally taxable governmental bonds with Federal subsidies for a portion of their borrowing costs. The program was created through the American Recovery and Reinvestment Act of 2009 to promote economic recovery and job promotion. The subsidies take the form of either tax credits provided to holders of the bonds or refundable tax credits paid to state and local governmental issuers of bonds. These bonds are considered Municipal bonds and MSRB rules are applicable for the sale and settlement of these bonds.