Today’s Bond Buyer featured an article warning about “[t]he threat that federal subsidy payments for Build America Bonds could be slashed under the sequestration process after administration officials assured issuers those payments were safe could permanently sour the muni market on BABs and other direct-pay bonds…”
In an alert to members over the weekend, the BDA also warned of potential harmful things to come if sequestration should go through as planned. In its alert, the BDA wrote that “the White House released a comprehensive report outlining specific federal budget cuts that will become effective January 2, 2013 unless Congress Acts to reverse legislation popularly known as “budget sequestration” that was enacted in the absence of a budget deal earlier this year.” The BDA further said that we have “reviewed the report and [are] issuing this alert to advise [members] that the legislation would cut by 7.6% the budget authority for Build America Bond payments, payments to issuers of Qualified Zone Academy Bonds, payments to issuers of Qualified School Construction Bonds, and payments to issuers of Qualified Energy Conservation Bonds.”
To reverse the “sequestration” bill, Congress must, by the end of this year, enact legislation to reduce the deficit by $1.2 trillion.
For the full article in the Bond Buyer quoting BDA, click [here.]
