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Homes and Community Renewal

Recovery Act Bond Program

In November 2009, the State of New York Municipal Bond Bank Agency (MBBA) began the Recovery Act Bond Program that helps local governments issue bonds under provisions of the federal American Recovery and Reinvestment Act (ARRA). Under the Recovery Act Bond Program, MBBA was authorized to purchase full faith and credit general obligation bonds issued by municipalities in the State of New York for ARRA purposes. MBBA, in turn, can then sell Recovery Act Bonds to raise funds to finance these purchases.

MBBA successfully completed its first Recovery Act Bond sale in December 2009 providing financing for six local governments. Financing through MBBA allows local government to achieve interest rate savings because MBBA has the flexibility to optimize the mix of taxable and tax-exempt bonds during the marketing period for its bonds. In 2010, MBBA sold two additional issues of Bonds under the program to provide financing for 10 additional local governments.

MBBA was able to take advantage of ARRA by selling Build America Bonds (BABs) and Recovery Zone Economic Development Bonds (RZEDBs). These are taxable bonds created under ARRA that receive federal subsidies for the life of the bonds-35% of interest payments for BABs and 45% of interest payments for RZEDBs.

The Federal ARRA provisions expired December 31, 2010. As a result, the MBBA Recovery Act Bond program is no longer active.

To read the Official Statement for MBBA's first Recovery Act Bond sale of $184.2 million in December, 2009, click here or MBBA's Second Recovery Act Bond sale of $116.3 million in May, 2010, click here or MBBA's Third Recovery Act Bond sale of $50.82 million in November, 2010, click here.

Last updated: 1/26/2011