SLGS offer flexible investment alternatives for state and local governments to refinance outstanding, tax-exempt debt.

These securities offer a flexible investment alternative for state and local governments to refinance their outstanding, tax-exempt debt.

Individual investors now hold 54.6 percent of the more than $760 billion in outstanding tax-exempt debt, the association said.

Competition from issuers of tax-exempt municipal debt should also be expected.

Build America Bond issuers benefit from substantial savings in borrowing costs when compared to issuing tax-exempt debt.

Currently the university does not have the authorization to issue tax-exempt debt.

Because of the strong demand for Build America Bonds and the federal government subsidy, MTA estimates it saved $46 million compared with issuing traditional tax-exempt debt.

"We can refinance KeySpan's taxable debt with LIPA's tax-exempt debt, which is far cheaper," he continued.

A. Between the two, they represent about 25 percent of total tax-exempt debt outstanding.

Meanwhile, more than $9 billion of the total $18 billion of these loans is not even financed by the original tax-exempt debt that created the loophole.