Pennsylvania tomorrow will issue $616.8 million of tax-exempt, long-term general obligation debt via competitive bid in what is expected to be the state's final bond issuance for fiscal 2009.

Absent from the transaction are taxable Build America Bonds, which have generated savings for issuers through a 35% federal subsidy on principal and interest payments. Pennsylvania officials evaluated using BABs, but state law dictates that the commonwealth must issue bonds competitively and offer serial maturities. Recent large BAB deals have included bullet and term maturities and were sold via negotiation.

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