Build America Bonds (BABs) are a type of municipal financing introduced in 2009. Investors get taxable interest payments, while issuers receive a subsidy from the U.S. Treasury. BABs have helped lower funding costs for state and local governments, with issuers saving money compared to regular municipal bonds. Institutional investors see higher yields with BABs than with Treasuries or corporate bonds. However, individual investors may not benefit as much from BABs compared to regular municipal bonds. Overall, the Federal government subsidy for BABs mainly benefits new investors in the municipal bond market, potentially disadvantaging individual U.S. taxpayers.