California is considering a sale of $3.5 billion to $4 billion in taxable bonds later this month, with Build America Bonds to be included in the offer to help finance public works, a spokesman for Treasurer Bill Lockyer said on Friday. The transaction would follow last month's closely watched and highly successful sale of $6.54 billion in general obligation bonds to help bolster infrastructure spending.
Build America Bonds are a new form of debt authorised under the federal economic stimulus law to help overcome obstacles presented by stressed municipal bond markets. Their interest can be taxed, but they offer a tax credit for the buyer, according to US Treasury guidelines released on Friday. "We plan to sell $3.5 billion to $4 billion in taxable bonds the week of April 13 or 20," Tom Dresslar, a spokesman for Lockyer, said in an e-mailed statement to Reuters.