New Jersey Flips Build America Bonds as IRS Scrutinizes Market

New Jersey’s pension fund, facing a $46 billion deficit, is bolstering its finances by buying Build America Bonds from the state’s debt underwriters, then selling them for a profit in as little as five days, state records show.

The pension, whose $700 million in Build America investments would make it the seventh-largest holder of the bonds, earned $2.6 million in the past year by rapidly buying and selling, or flipping, the taxable debt issued by municipalities across the U.S., according to data compiled by Bloomberg.