State and local governments might pay at least $4.2 billion more in interest on Build America Bonds than companies with similar credit ratings, according to a Bloomberg analysis of the program, which is a component of the $787 billion federal stimulus package.

The $17.4 billion of Build America Bonds sold since April pay an average yield that’s 0.96 percentage point more than corporate securities with the same ratings, Bloomberg reported.

“Taxpayers are taking it on the chin,” said G. Joseph McLiney, president of Kansas City, Mo.-based McLiney & Co., which specializes in selling municipal bonds that qualify for federal tax credits. “There should be no spread.”

For example, the Indiana Finance Authority sold $191.6 million of the debt on June 23 that was rated Aa3 by Moody’s Investors Service and yielded 6.6 percent. The day before, pharmaceutical giant Merck & Co. issued $750 million of 30-year bonds with the same rating to yield 5.86 percent. As a result, Indiana will pay $1.4 million more in annual interest than Merck, Bloomberg said.

Build America Bonds opened credit markets to municipalities after the collapse of Lehman Bros. Holdings Inc., but states and cities are being penalized compared with corporations, which are 90 times more likely to default than local governments, according to Moody’s.

The program provides a federal subsidy for 35 percent of the interest costs on taxable bonds sold by states, local governments and universities to finance capital projects that create jobs.