Comment on "Tax-subsidized underpricing: Issuers and underwriters in the market for Build America Bonds" by Richard C. Green, Dario Cestau, and Norman Schürhoff

- Build America Bonds (BABs) are tax-subsidized municipal bonds.
- BABs are underpriced, in part due to tax distortions
- Underwriting costs are less for BABs when their underpricing is high.
- Certain features of the underpricing are not explained by the theory in this paper.
- The opaque nature of the municipal market makes it difficult to improve liquidity.