WASHINGTON (MNI) – The following is the text of a statement
Thursday by the U.S. Treasury Department, announcing that $106 billion
Build America Bonds were issued through May 31:

The U.S. Department of the Treasury today released its monthly
comprehensive update on Build America Bonds issuances, including
state-by-state data, showing $106 billion has been issued through May
31, 2010. Build America Bond issuers benefit from substantial savings
in borrowing costs when compared to issuing tax-exempt debt.

“More than $100 billion in Build America Bonds has been issued by a
broad range of state and local governments, demonstrating their
continued popularity with both issuers and investors,” said Alan B.
Krueger, Assistant Secretary for Economic Policy and Chief Economist at
the Treasury Department. “Build America Bonds have had a very strong
reception from state and local governments as a way to provide financing
for critical building projects in a way that minimizes costs for
taxpayers.”

Build America Bond issuance in the first 12 months of the program
will save state and local governments across the country an estimated
$12 billion in net present value relative to what they would have paid
had they issued tax exempt bonds, according to a Treasury analysis. For
example, as of May 31, 2010, issuers in the state of Wisconsin have
issued $1.32 billion in Build America Bonds in 95 separate issues
yielding a net present value savings to Wisconsin taxpayers from the
Build America Bonds program of approximately $29 million, according to
Treasury analysis.

“The American Recovery and Reinvestment Act has helped every state,
including Wisconsin, deal with the most difficult national economic
times since the Great Depression, while paving the way for future
economic growth,” Governor Jim Doyle said. “Through Build America Bonds,
we have a powerful tool to help Wisconsin communities save money, invest
in important projects that create jobs, and chart a path toward
recovery. Wisconsin is putting to work over $1.3 billion in Build
America Bonds – saving our taxpayers tens of millions of dollars and
making long-term investments to provide clean water, highways, higher
education, and other critical infrastructure projects.”

Market reception for Build America Bonds has been very positive.
Between the program launch on April 3, 2009 and May 31, 2010:

– $106 billion in Build America Bonds has been issued;

– Build America Bonds now constitute 21 percent of the municipal
bonds market; and

– There have been a total of 1,306 separate issuances of Build
America Bonds by local or state governments in 49 states, the District
of Columbia and two territories.

The Build America Bonds program, created by the American Recovery
and Reinvestment Act, allows state and local governments to obtain
much-needed financing at lower borrowing costs for new capital projects
such as construction of schools and hospitals, development of
transportation infrastructure, and water and sewer upgrades. Under the
Build America Bonds program, the Treasury Department makes a direct
payment to the state or local governmental issuer in an amount equal to
35 percent of the interest payment on the bonds.

The Obama Administration’s FY 2011 Budget proposes to make Build
America Bonds permanent with a 28 percent subsidy rate. This rate is
estimated to be revenue neutral relative to the estimated future Federal
tax expenditure for tax-exempt bonds. The Budget also proposes
expanding the eligible uses of Build America Bonds to cover a wider
range of municipal borrowing, including original financings for public
capital projects, current refundings for public capital projects,
short-term working capital, and nonprofit 501(c)(3) organization
financings.

BAB Issuances and Volumes

Time Period Number
Issues Volume
$Mln Percent of
Muni Total
2009:
April 12 7,632 20.1
May 41 2,699 8.1
June 87 4,993 11.0
July 70 3,532 12.9
August 107 9,632 24.5
September 112 6,795 20.7
October 112 12,944 29.6
November 106 7,539 16.2
December 99 8,047 28.0
April to December 746 63,814 19.0

2010:
January 96 7,078 21.3
February 96 7,243 25.8
March 133 12,600 25.9
April 120 6,375 23.5
May 114 8,961 33.0
January to May 560 42,263 25.7

Since BABs inception:
April 2009 to April 2010 1306 106,080 21.2

Source: U.S. Treasury Department

** Market News International Washington Bureau: 202-371-2121 **

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