Press Releases
RW Smith Supports Treasury Department Proposal to Make Its BABs Program Permanent
NEWS RELEASE
February 1, 2010
In response to the Treasury Department’s proposal issued today on its Build America Bonds (BABs) program, Paige Pierce, president and CEO of RW Smith, issued the following statement:
“RW Smith is in favor of making the BABs program permanent. Presently the federal subsidy level is at 35% and that will drop to 28% if approved. However the proposed federal subsidy should lessen infrastructure borrowing costs to local and state governments which is sorely needed now and for the foreseeable future.
“The BABs program has proven to be a success in the marketplace over the past year, providing local and state governments the ability to competitively finance necessary projects while breathing new life into the municipal taxable market. This is a program that should be moved to permanent status because everyone wins here, local and state governments, members of the community, as well as investors.”
Headquartered in Bellevue, WA, RW Smith www.rwsbroker.com is an interdealer broker in the fixed income (debt) markets with 14 offices across the U.S. Interdealer brokers facilitate transactions in the wholesale financial markets between dealers, dealer banks, and qualified institutions around the world.
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The following is summary language from SIFMA regarding the Treasury Department’s proposal to make its BABs program permanent:
“The Fiscal Year 2011 budget would make the Build America Bonds program permanent at a Federal subsidy level equal to 28 percent of the coupon interest on the bonds.
“The proposed Federal subsidy level is intended to be approximately revenue neutral relative to the present Federal tax expenditure for tax-exempt bonds. The proposed Federal subsidy rate for Build America Bonds should lessen borrowing costs to State and local governments compared to tax-exempt bonds due to inefficiencies inherent in the tax-exempt bond market.
“This proposal would also expand the eligible uses for Build America Bonds to include the following: (1) original financing for governmental capital projects, as under the initial authorization of Build America Bonds; (2) current refundings of prior public capital project financings for interest cost savings where the prior bonds are repaid promptly within ninety days of issuance of the current refunding bonds; (3) short-term governmental working capital financings for governmental operating expenses (such as tax and revenue anticipation borrowings for seasonal cash flow deficits), subject to a thirteen-month maturity limitation; and (4) financing for Section 501(c)(3) nonprofit entities, such as nonprofit hospitals and universities.
The proposal would be effective as of January 1, 2011.”
Media Relations Contact:
Sharon Spaulding
Outside the Box
Sharon@outsidethebox.us.com
801-918-9995