WASHINGTON — The District of Columbia expects to issue $522.4 million of Build America Bonds before the end of the year. The capital city is planning to use the general obligation credit for the first time in two years in one of the deals to maximize the BABs savings.
The district has not issued long-term GOs since 2008, preferring instead to issue its higher-rated income tax-secured revenue bonds. However, the district will hit its legal limit for income tax-secured bond issuance before the end of the year. District officials said they are wagering a better savings rate can be achieved by issuing GO BABs now, rather than issuing income tax-secured bonds as traditional tax-exempt debt next year — assuming the BAB program expires on Jan. 1.