More than $150 billion issued in Build America Bonds

State and local governments have issued more than $150 billion in Build America bonds during the past 18 months, the Treasury Department announced Friday. 

"In the beginning, Build America Bonds helped fill a critical hole in the municipal finance market left by the financial crisis," said Alan Krueger, assistant secretary for Economic Policy and chief economist at Treasury. "They have now become an important source of financing to help state and local governments undertake much-needed infrastructure projects."

The bonds, a part of the 2009 economic stimulus, have helped those state and local governments to save billions in financing costs compared with tax-exempt debt bond market that has faced "significant challenges over the past two years," Krueger said. 

Build American Bonds provide a federal subsidy equal to 35 percent of the taxable borrowing cost.

Since the program was launched April 3, 2009, more than 1,900 bonds have been issued in all 50 states and the District of Columbia and two territories and make up about 21 percent of the municipal bonds market, according to Treasury's figures. 

The Obama administration's fiscal 2011 budget requested making the bonds permanent with a 28 percent subsidy rate, which is estimated to be revenue neutral in relation to the expected future federal tax expenditure for tax-exempt bonds.