Texas sold $9.8 billion of one-year notes at a record low yield for the state of 0.23 percent, beating last year’s results, Comptroller Susan Combs announced.
JPMorgan Chase and Citigroup Inc. issued winning bids for the largest portions of the tax-exempt notes, which will let the second-most-populous U.S. state fund schools until it collects revenue. The yield of the sale, which ties 2011’s record size, beat last year’s 0.27 percent.
Texas borrowed at 4 basis points higher than AAA one-year munis, halving the difference of last year’s sale.
California’s sale of $10 billion of revenue-anticipation notes Aug. 16 was 17 basis points to 27 basis points higher than the benchmark. A basis point is 0.01 of a percentage point.
JPMorgan won about $5.2 billion of the sale and Citigroup about $2 billion, according to data from the comptroller.
Texas has sold short-term notes annually since 1987 to provide aid to school districts when its fiscal year begins Sept. 1. The state then reserves tax revenue to repay the debt within 12 months. This year’s issue is to be repaid Aug. 30, 2013.