For Immediate Release
August 7, 2008
Texas Receives Highest Ratings on Short-Term Notes
Wall Street Shows Confidence in the Texas Economy
(AUSTIN) — Wall Street bond raters give Texas their highest marks on the Aug. 19 sale of $6.4 billion in short-term Tax and Revenue Anticipation Notes (TRANs), Comptroller Susan Combs announced today.
“Standard & Poor’s, Moody’s and Fitch took notice of Texas’ strong employment growth; the fact that the state largely avoided the housing price bubble — and the bursting of that bubble — experienced by many other states; and this year’s oil and natural gas revenues, which are on track to provide for a transfer of $2 billion more into the state’s Rainy Day Fund,” Combs said. “I am delighted Wall Street recognizes that the troubled national economy is not indicative of the robust business climate and continuing economic health here in Texas.”
The high ratings on Texas’ TRANs come shortly after a new survey of corporate executives, who overwhelmingly rank Texas the best U.S. state for conducting business due to its attractive work force costs, pro-business atmosphere and favorable tax structure.
Texas’ 2008 Series TRANs are rated SP-1+ by Standard & Poor’s, MIG 1 by Moody’s Investors Service and F1+ by Fitch Inc., the highest ratings issued by the three bond rating firms.
Fitch Inc. analysts noted Texas’ excellent record of cash management and conservative revenue estimates.
Standard & Poor’s said, “Texas’ economy continues to outperform the nation across most sectors…Moreover, over the past year, Texas added more jobs than the total added in the states ranked second through eighth.”
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. CDT on Aug. 19 through the auction Web site operated by the Grant Street Group at https://www.TRANTEXAS.com. The notes will be paid off in August 2009.