By IANTHE JEANNE DUGAN
Brokerage Firms Net $1 Billion-Plus for Selling the New Bonds, but Say It Can Be Hard Work
MARCH 10, 2010
Wall Street firms have received fees exceeding $1 billion in less than a year selling "Build America Bonds" meant to spur jobs in struggling cities, often charging municipalities higher costs than for traditional bond deals.
These new bonds were rolled out in April 2009 under President Obama's economic stimulus plan to create jobs building roads, schools and hospitals. Unlike conventional municipal debt, the new bonds are taxable and generally carry higher interest rates.
The U.S. pays 35% of the interest, so the bonds have enabled local governments to borrow during a credit crunch and save money at the same time, making the higher costs a wash for them.
The underwriting fees come as Wall Street continues to recover even as many municipalities remain in poor financial shape... FULL ARTICLE
Posted on
Wed, March 10, 2010
by Crystal Drwenski