Governments in 48 states have raised $90 billion in 1,066 bond sales through the program as of last week, according to the Treasury Department. The program, created by the American Recovery and Reinvestment Act of 2009 and recently extended by Congress (see March 19 AASHTO Journal story), results in a net transfer of money from the federal government to state and local governments because Washington subsidizes the bonds' interest payments.

Build America Bonds have become so popular in their first year that they now make up 20 percent of the total municipal bond market, said Alan Krueger, Treasury's chief economist and assistant secretary for economic policy.

The new bonds have provided savings on interest costs for issuers at virtually all maturities. The estimated savings for a 10-year bond is 0.31 percentage points and the savings for a 30-year bond is an average of 1.12 percentage points.

The House of Representatives approved a bill (HR 4849) last month to extend the duration of Build America Bonds for three additional years, providing more federal subsidies for state and local governments who wish to use the bonds to finance infrastructure projects. (see March 26 AASHTO Journal story)

Treasury's 11-page report is available at tinyurl.com/Treasury-BAB.