Texas may have a reason to feel upbeat these days as the state's bonds appear to be trading above the national average.

The Municipal Advisory Council of Texas says its year-old 12-bond index shows Texas bonds have beaten the national indexes for the last two consecutive two-week periods.

Danny Burger, executive director of the MAC, which is the state industry trade group, said the index fared better than The Bond Buyer's 20-bond general obligation index in the fourth week of June and in the second week of July by three and one basis points, respectively.

For the fourth week of June, the Texas index came in at 7.1%, compared with 7.13% on the 20-bond index; and 7.06%, compared with 7.07 in the second week of July, according to the Texas Bond Reporter, the group's weekly newspaper.

During the same weeks, The Bond Buyer's 25-bond revenue index was at 7.3% and 7.19%, respectively.

This period marked the first time since the Texas index was started in July 1990 that it outpaced the national trend.

"I have a perception here that every month that goes by, the market is willing to pay a better price for Texas bonds," Mr. Burger said. "I think it's good news."

Mr. Burger believes Texas bonds are now trading and selling as strongly as before 1985, when a collapse in the energy and real estate markets pushed the state into the deep recession that cost Texas its triple-A rating.

The Texas index is measured twice monthly by polling nine bond houses on six revenue and six GO bonds. The brokerages are: Texas Commerce Bank, Bank One, NCNB Texas, Rauscher Pierce Refsnes, The Principal/Eppler, Guerin & Turner, Kemper Securities Group, Merrill Lynch, Lehman Brothers, and Kidder Peabody.

Mr. Burger said the high and low numbers are not used, leaving seven factors to determine the Texas index.

The 20-year GO bonds used are State of Texas, Harris County, Travis County, city of Dallas, city of San Antonio, and the Fort Worth Independent School District.

The 25-year revenue bonds used are Texas A&M Permanent University Fund, El Paso Water, Dallas/Forth Worth International Airport, Lower Colorado River Authority, Harris County Toll Road, and Sister of Charity Hospital system.

Mr. Burger admits that comparing a mixed revenue and GO bond index to a national GO indicator is not a pure process. After all, the Bond Buyer ratings are indexed to an A-rating average, while the Texas figures are based on ratings of nine double-A, two single-A, and one triple-A.

But still Mr. Burger is optimistic, saying, "Maybe we've got a trend."

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