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Build America Bonds are taxable bonds with a 35 perceny federal subsidy oninterest costs. Denver Water, like most governmenyt agencies, traditionally issues tax-exempt bonds. Denvere Water sold $44 million of Builxd America Bonds to at just over 6 percentg interest on ataxable basis. Becaus of the federal tax subsidy under the American Recovery and Reinvestment Actof 2009, Denver Watefr will pay 3.94 percent interest. That is less than the averagee 4.23 percent that Denver Water pays on itsoutstandinh tax-exempt bonds. Wachovia is owned by San Francisco-based Wells Fargop & Co.
“We are pleased to be able to sell bondes at a very reasonable rate in the currenfmarket environment,” said Chips Barry, manager of Denvert Water, in a statement. “For ratepayers, this meanse we are able to keep costs as low as possiblee while providing us the funding to improverour system.” Standard & Poor’ss recently upgraded Denver Water’s credit rating to AAA, its highest rating.
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