Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts, Glenn Hegar

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Contact: Allen Spelce or R.J. DeSilva

For Immediate Release
August 14, 2007

Wall Street Gives Texas High Ratings on Short-Term Notes

AUSTIN — With Texas’ economic strength, higher-than-anticipated revenues and conservative financial management as contributing factors, Wall Street gives Texas outstanding ratings on the Aug. 21 sale of $4.9 billion in short-term Tax and Revenue Anticipation Notes (TRANs), Comptroller Susan Combs announced today.

Texas’ 2007 Series TRANs are rated SP-1+ by Standard & Poor’s, MIG1 by Moody’s Investors Service and F1+ by Fitch Inc., the highest ratings given by the three New York bond rating firms.

“The Texas economy continues to outperform the U.S. economy, and this has resulted in the strong revenue collections we’ve seen in fiscal 2007,” Combs said. “Specifically the sales tax — the state’s largest tax — has seen strong growth from consumer purchases as well as purchases from businesses involved in sectors such as manufacturing and oil and gas.”

Fitch Inc. analysts noted, “Texas has an excellent record of cash management, and revenue estimates tend to be conservative. The Texas economy has enjoyed strong growth in recent years with gains since 2004 ahead of the nation.”

Standard & Poor’s said its rating is based on “the state’s strong credit factors” and healthy economic signs such as employment growth above the national average.

In assigning its rating, Moody’s noted “Texas’ history of successful short-term borrowing,” as well as the state’s strong cash management procedures.

The state has sold TRANs every year since 1986 to help meet its financial obligations — particularly the distribution of state funds to school districts — between the start of the fiscal year Sept.1 and the arrival of tax revenues later in the year.

The TRANs will be sold from 9-10 a.m. on Aug. 21 through the auction Web site operated by the Grant Street Group at https://www.TRANTEXAS.com. The notes will be paid off in August 2008.


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