Munis

Texas State Bankshares has agreed to buy Estrada Hinojosa & Co., one of the nation's biggest municipal underwriting and advisory firms.

While it's still relatively early to tell how much — if at all — the muni market will be impacted, Kara South, portfolio manager at GW&K Investment Management, said downgrades of certain municipal bonds are likely to follow.

The group of banks would pay $68 million to settle the lawsuit, which originally estimated damages at $340 million.

The plaintiff that brought the case on behalf of the state says the banks inflated interest rates through a private, invitation-only VRDO index that influenced SIFMA's weekly index.

The resignation comes after the bank was placed on the state treasurer's list of fossil fuel industry boycotters.

The Infrastructure Investment and Jobs Act provides billions in grants for state and local governments. The challenge now is how quickly and effectively they can spend it amid an inflation–fueled rising–rate environment.

The Swiss bank's municipal-underwriting subsidiary lost out on a bond deal after the state comptroller included the parent company on a list of firms he deems "boycott" the fossil fuels industry.

A Texas city declined to award a bond deal this week to Citigroup even though the bank submitted the most competitive bid, showing how Wall Street is still contending with a Republican-backed state law that punishes financial firms for taking on gun policies.

JPMorgan Chase, which has mostly been absent from the business of underwriting Texas municipal bonds for the past year, plans to revive its work with the state and its local governments soon.

JPMorgan Chase led U.S. banks increasing direct loans to states and local governments last quarter as the firms filled a void left by mutual fund investors who fled the traditional municipal bond market amid soaring inflation and surging yields.