Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ News / Texas Muni Borrowers Bemoan Anti-ESG Laws Restricting Banks
BackBack

Texas Muni Borrowers Bemoan Anti-ESG Laws Restricting Banks

Texas borrowers gathered at an industry conference bemoaned two Republican-backed laws in the state that issuers say have restricted which Wall Street banks they can do business with.

Texas Muni Borrowers Bemoan Anti-ESG Laws Restricting BanksPremium
Texas Muni Borrowers Bemoan Anti-ESG Laws Restricting Banks

(Bloomberg) -- Texas borrowers gathered at an industry conference bemoaned two Republican-backed laws in the state that issuers say have restricted which Wall Street banks they can do business with. 

The local officials spoke on a panel Tuesday before a packed room of city representatives, bankers and lawyers at an event hosted by the Bond Buyer in Austin. Several bankers at the conference work at firms that have been ensnared by the laws at various points since they took effect almost three years ago. 

“I look around the room, I’m seeing a bunch of bankers, lawyers, prospect vendors that want to knock on the door of all the municipalities up here to do business," said Vernon Lewis, director of the Treasury Department for the city of Houston. The “person that really needs to be in the room is the attorney general and the comptroller."

Lewis said the new rules limited the number of liquidity providers the municipality could work with on its nearly $3 billion commercial-paper program, which it uses for capital-improvement projects.

Texas enacted the laws, which target banks for their firearm and energy policies, in September 2021. The measures roiled the state’s roughly $50-billion-a-year municipal-bond market as firms have faced various hurdles in operating there. Citigroup Inc. was banned from working on muni deals in Texas last year due to its firearm policies, and UBS Group AG was placed on a list of companies that — as the state sees it — “boycott" the fossil fuels industry. 

Texas Attorney General Ken Paxton is in the middle of a months-long probe of banks’ energy policies. Texas’ comptroller, who has published a list of companies that he deems are boycotting the energy industry, speaking at the conference Tuesday, said he wanted banks to be able to do business there to support the state’s economy. 

For Amy Perez, deputy executive director for the Office of Management and Budget for Harris County, the new measures are creating extra work.

Her team now hires two dealers on bond deals, she said, instead of their usual practice of just choosing one, in case either of them gets entangled in the ESG probes.

She said she has yet to notice a pricing differential on bond deals.

“Anytime you lose competition of any kind it is a concern," she said. “It could possibly get to a point that we see a differential in pricing."

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 17 Apr 2024, 12:19 AM IST
Next Story footLogo
Recommended For You