(Bloomberg) -- A key debt-refinancing tool for state and local governments and the creation of a Build America Bonds-style debt program are among the municipal-bond provisions that have been left out of the Build Back Better legislation proposed by the Biden administration on Thursday.
Advance refundings, a new version of taxable Build America Bonds, an expansion of bank-qualified bonds and an increase in private activity bond issuance aren’t in the latest bill.
“Never been more disappointed,” Emily Swenson Brock, director of the Government Finance Officers Association’s Federal Liaison Center, said in an email on Thursday. “Bonds are out entirely in the framework.”
Brock added that “there’s still some process to go,” meaning one or more of the provisions could be added back into the legislation as it’s still subject to possible amendment.
Bond issuers, bankers and buyers in the $4 trillion market had welcomed the provisions when the new bill was unveiled in September, saying they could spur the issuance of tens of billions of dollars in new bonds. Their enthusiasm was short-lived. “Like a scene from a movie that wasn’t crucial, muni provisions got left on the cutting room floor,” said Eric Kazatsky of Bloomberg Intelligence. “This speaks to the growing divide between the importance of these provisions to MuniLand and perhaps lack of importance to everyone else.”
Related: Muni Market Cheers House Democrats’ Bond Proposals
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