Billion Dollar Babies: Build America Bonds to Build Dallas Area Rapid Transit's Light Rail and Maybe the Convention Center Hotel

Categories: Biz
Dallas Area Rapid Transit
The Martin Luther King Jr. station, part of the Green Line expansion
No doubt you've heard of the Build America Bond -- "the financial crisis equivalent of war bonds," says this BusinessWeek explainer from last month, if you haven't. Dallas Area Rapid Transit has certainly heard of 'em, as today it sold $830 million worth of the suckers to expand light rail service. And, on top of that, DART sold $170 million in tax-exempt bonds for a grand total of $1 ... billion ... dollars worth of ka-ching. The Dow Jones wire has the down-to-the-decimal-point details; earlier today, The Bond Buyer said this was shaping up to a sale of historic proportions.

Update: At Monday's Economic Development Committee meeting, Assistant City Manager A.C. Gonzalez and city staff discussed the possibility of using Build America Bonds to fund the $514 million bond issuance for the convention center hotel project.

The parameters bond ordinance expected to get a rubber stamp at Friday's special called council meeting authorizes a "maximum interest yield" of 5.5 percent on the bonds for the hotel deal, as we reported Monday.

This means the city can sell Build America Bonds at a percentage higher than 5.5 with the expectation that reimbursements from the federal government will yield an amount equivalent to or below 5.5.

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