Denver Water first to issue Build America Bonds

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Here’s the release from Denver Water via Stacy Chesney.

Denver Water is on board with provisions of the American Recovery and Reinvestment Act of 2009, being the first organization in the state to issue Build America Bonds. From their release (no deep link available):

While most government agencies, including Denver Water, traditionally issue tax-exempt bonds, the Build America Bonds are taxable bonds with a 35 percent federal subsidy on interest costs. Denver Water awarded $44 million of Build America Bonds to Wachovia Bank National Association at just over 6 percent interest on a taxable basis. However, because of the federal tax subsidy, Denver Water actually will pay 3.94 percent interest. That amount is less than Denver Water’s outstanding tax-exempt bonds, on which it pays an average of 4.23 percent interest.

The bond will allow Denver Water to pay for capital projects, such as infrastructure improvements, at a lower interest rate than it would if it had issued a tax-exempt bond.

More Coyote Gulch coverage here.

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