By Michael McDonald

June 25 (Bloomberg) -- Barack Obama may be the worst thing that ever happened to tax-exempt bonds and, so far, states and municipalities are loving it.

Build America bonds, taxable securities that pay 1 percentage point more in interest than corporate debt on average, are such a hit with investors that the government is already considering expanding the program, according to John J. Cross, the Treasury's tax legislative counsel. Municipalities sold $14.4 billion of the securities and Barclays Plc analysts predict the amount may grow 10-fold because the federal government helps pay the bonds' interest.

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Posted by boyang at June 25, 2009 7:24 AM