Build America Bonds (BABs)

Build America Bonds (BABs) were created as part of the Recovery Act of 2009 in order to provide new sources of financing for state and local government. The federal government subsidizes 35 percent of the interest on qualifying bonds, thus lowering the borrowing costs for the local government.

The aim of the Build America Bonds program is to support local infrastructure projects such as transportation improvements, investment into new schools, hospitals and government buildings, and rebuilding public utility networks such as water, sewer and energy infrastructure. These projects also server to create more jobs in the local communities that partake in the program.  So far, over $100 billion in Build America Bonds have been issued across the US.