2021 Texas Municipal Bond Issuance totals
Courtesy Bloomberg

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The lucrative Texas municipal-bond market, second only to California in terms of issuance, has been turned on its head since a law took effect Sept. 1 that bars state entities and local governments from working with firms if they “discriminate” against firearms companies.

With some of Wall Street’s largest banks having halted public-finance transactions in Texas because of the legislation, Jefferies is leading firms that have seen their business surge. It was the top municipal underwriter in the fast-growing state for the past four months, whereas in the same period last year it was 12th, data compiled by Bloomberg show.

“This is the biggest-growing place in the muni market — other firms that are comfortable with the compliance will likely make a bigger play for Texas,” said Martin Luby, a professor who researches public finance at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. With the law creating an opportunity for smaller firms, “they should get a little more aggressive and will likely ramp up hiring.”

— Amanda Albright and Danielle Moran in Jefferies Emerges as Winner as Texas Gun Law Rattles the Muni Market

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