DALLAS — Texas will price $5.4 billion of tax and revenue anticipation notes this month to smooth cash flows to the state's school districts.
This year's issue is about $1.8 billion less than the $7.2 billion issued in 2014.
The sale will take place Tuesday, Aug. 26, from 9-10 a.m. CDT at
Texas has sold TRANs since fiscal 1987. With the state's general obligation debt rated triple-A by three ratings agencies, this year's notes deal also carries top short-term ratings.
"These top ratings reflect confidence in our state and its economic growth," Texas Comptroller Susan Combs said in a prepared statement. "Our state government continues its pledge to be fiscally responsible by spending taxpayer dollars wisely. This commitment is reflected in the bond rating firms' confidence that Texas TRAN notes are a solid investment."
Fitch Ratings cited the state's "low debt burden, conservative financial operations and a growth-oriented economy that continues to outpace national averages."
"Longer term fiscal pressures stem from having to adequately fund the state's rapid growth, including for transportation, schools and water," wrote Fitch analyst Douglas Offerman.
The state has access to $6.7 billion in its rainy day fund as backup for the debt. The rainy day fund, known formally as the Economic Stabilization Fund, is derived from oil and gas production in the state.
The 2013 Legislature authorized one-time rainy day fund withdrawals of $3.9 billion for water, educational and fire suppression needs. A November ballot measure would temporarily divert half of current formula deposits instead to highway infrastructure.
"Even with recent draws and the proposed formula change, which Fitch expects voters to approve, the comptroller forecasts a deposit of $1.7 billion during fiscal 2015, which would bring its balance to nearly $8.4 billion by fiscal year-end, equal to 9.6% of forecast fiscal 2015 GRF cash receipts," Offerman said.
