Standard & Poor's said in a report Friday that if issuers of direct-pay Build America Bonds pledge or plan to use the federal payments for debt service, then it will evaluate their ability to cover the debt service in case they are left waiting by the mailbox for checks the federal government promised to send.

For direct-pay BAB issuers who have no plan to use the federal payments for debt service, the rating agency said it would assign ratings based on the security for the bonds, such as the full faith and credit of the issuer or pledged revenues.

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