Build America Bonds (BABs)

Definition

A municipal bond created to lower the cost of state and local borrowing. BABS were part of the 2009 American Recovery and Reinvestment Act and are available in either tax credit bonds or direct payment bonds.

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The Build America Bonds was a special class of securities that people could invest in and feel as they they are contributing to others.

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If the voters pass the bond issue, the City Council will probably choose Build America Bonds (BABs) to fund the new storm drainage system.

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This year, it was decided wise to purcase several thousand Build America Bonds in an attempt to give back to the country, as these bonds are not very profitible when compared to other investment options businesses have.

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