“As a result, we engaged with representatives of Citi to discuss their policies,” the statement said. “More recently, Citigroup and the City of Anna recently contacted my office and asked us if we were still reviewing Citi’s eligibility to contract with Texas under SB 19. We confirmed that we were.”
Mark Costiglio, a Citigroup spokesperson, said the bank has certified that it complies with both laws and continues to participate in numerous public-sector transactions in Texas.
“We do not believe the claims made by a third-party organization have any merit and we continue to support our clients in this important market,” he said in a statement.
Citigroup offered a true interest cost of 4.215% on a roughly $60 million portion of the offering, while Baird offered 4.24%, according to the Anna spokesperson.
“The City Council is confident in Robert W. Baird’s ability to ensure the sale of the bonds will close in October with the lowest possible costs and ascertain the City’s important public projects move forward efficiently,” the city’s statement said.
A Baird representative didn’t respond to a request for comment.
A paper published earlier this year found that Texas municipal borrowers have been hit with as much as $532 million of extra debt costs because of the two new laws, which have led some of the nation’s biggest banks to pause muni underwriting there.
Citigroup has been underwriting deals in Texas for months, most recently pricing $223 million of sustainability bonds for the Harris County Flood Control District last week. The bank is slated to underwrite almost $1 billion of bonds for a state water board later this month.
The bank is the fifth-biggest underwriter of Texas municipal-bond deals in 2022, compared with 8th-biggest for all of 2021, according to data compiled by Bloomberg.
This article was provided by Bloomberg News.