As the trickle of taxable Build America Bonds coming to market turned into a flood last year, issuers’ underwriting-designation policies followed the course charted by the corporate market. In recent months, signs have emerged that the tide is turning and there is no agreement on whether or not that’s a good thing.

When New York City priced $644.6 million of general obligation BABs yesterday, it went back to the compensation model known as “net designated” for the second time in two weeks. Prior to last week’s New York City Municipal Water Finance Authority’s $500 million deal, the city had used the “group net” model common in the corporate bond market on all of the $3.23 billion of BABs it had sold since 2009.

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