Investors Begin to Challenge Legality of BABs Redemptions.

A group of investors has challenged the legality of the Regents of the University of California's ability to trigger an extraordinary redemption provision to refund their outstanding Build America Bonds (BABs). The investors argue that the Regents have no legal basis to redeem the securities in this manner. The challenge comes as other issuers are also considering using the extraordinary redemption provision to refund their BABs. The outcome of this challenge may impact future refundings and may lead to increased tax-exempt supply if the refundings proceed. [Extracted from the article]