(Austin)--Texas Comptroller Carole Keeton Strayhorn today announced that Texas' 2006 Series Tax and Revenue Anticipation Notes (TRANs) have received the highest possible ratings from New York's top bond rating firms: SP1+ from Standard & Poor's, MIG 1 from Moody's Investors Service and F1+ from Fitch Inc.
"This is great news. Once again, Wall Street has shown its confidence in Texas' strong and resilient economy," Strayhorn said. "The bond rating firms also have a high regard for Texas' track record of conservative revenue estimating, pay-as-you-go budgeting and prudent financial management.
"The money from the sale of these notes helps the schoolchildren of Texas by funding school districts at the beginning of the school year," Strayhorn said.
High bond ratings mean lower interest rates, and lower interest rates translate to millions of dollars saved in decreased debt service costs for Texans and produce a net gain to the state. The notes are paid off at the end of each fiscal year
In rating Texas' 2006 TRAN notes, Fitch Inc. said the decreasing size of Texas' TRAN issuances since 2004, when $7.4 billion was issued "reflect the state's return to economic and fiscal strength since the last recession." Fitch and Standard & Poor's noted that state sales tax revenue has increased 12 percent in the last year and oil and gas tax revenue is up more than 40 percent. All three rating agencies cited projected year-end balances of $5.8 billion in FY06 and $3.7 billion in FY07.
On August 22, the Comptroller will sell $4.6 billion in TRAN notes, down from $6.2 billion in fiscal year 2005. The 2006 TRAN notes will be sold through the auction website operated by the Grant Street Group at www.TRANTEXAS.com from 9 a.m.-10 a.m. CDT.
The state has sold TRANs every year since 1986 to help the state meet its financial obligations, such as to school districts, between the beginning of the new fiscal year in September and the arrival of tax revenues later in the year.