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Yesterday, IBAT President and CEO Christopher Williston appeared before the Texas Transportation Commission to provide public comment on the Commission’s announced plans to exercise a make-whole call provision on bonds issued in 2020. The testimony reinforced concerns raised by IBAT in a letter to the commission earlier this week.

Under the announced plan, banks that purchased the bonds are facing an approximately 20 percent loss on the so-called “make whole” provision.

“Community banks are proud and consistent purchasers of public debt—as bond issues from local and state entities empower the betterment of the places we call home,” Williston said. “Completion of this plan will result in real and substantial harm for the state’s banks and other investors,” he added.

“While the commission is well within its contractual rights to exercise the provision, doing so will harm trust and good will with investors and result in more costly bond issues in the future.”

IBAT will continue to monitor this situation and advocate for banks that will be harmed by the utilization of this harmful and novel provision.