Texas School Buys Credit With New Cash

  • 13 Oct 2002
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The Texas Permanent School Fund is planning to add up to 2-3% of its portfolio, or $140-210 million, to corporate bonds over the next two or three months in a bid to add yield. Carlos Veintemillas, portfolio manager overseeing some $7 billion of taxable fixed-income in Austin, says he is looking at short duration single- and double-A credits. To finance the purchases, the fund will use the proceeds from prepayments in its mortgage-backed securities portfolio, and new cash from royalties the fund receives for oil and gas fields on public lands. Veintemillas says he is waiting for evidence of increased capital expenditures by companies before making the move.

Veintemillas declines to say which sectors of the corporate market the fund is eyeing. However, recent purchases include the Boeing Co. 5.75% notes of '07 (A3/A+), which were trading at 203 basis points over Treasuries last Monday. He says Boeing has been punished excessively for its reliance on the troubled commercial airline sector, given that it also has significant exposure to the defense industry, which is in good shape. The fund also recently added the CIT Group 5.5% notes of '04 (A2/A), which were trading at 321 basis points over the curve. Veintemillas argues that CIT spreads will improve now that it is no longer owned by scandal-plagued Tyco International.

At a duration of 3.81 years, the Austin-based fund is neutral to its bogey, the Lehman Brothers aggregate index. It allocates 31% to mortgage-backed securities, 28% to U.S. Treasuries, 22% to corporates, 11% to CMBS and 7.5% to agencies.

  • 13 Oct 2002

All International Bonds

Rank Lead Manager Amount $m No of issues Share %
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1 Citi 415,838.72 1590 9.03%
2 JPMorgan 379,647.36 1732 8.25%
3 Bank of America Merrill Lynch 359,324.90 1302 7.81%
4 Goldman Sachs 267,102.04 920 5.80%
5 Barclays 266,010.35 1070 5.78%

Bookrunners of All Syndicated Loans EMEA

Rank Lead Manager Amount $m No of issues Share %
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1 HSBC 45,073.36 191 6.67%
2 Deutsche Bank 37,312.62 138 5.52%
3 BNP Paribas 36,204.20 208 5.36%
4 JPMorgan 34,040.23 112 5.04%
5 Bank of America Merrill Lynch 32,958.96 107 4.88%

Bookrunners of all EMEA ECM Issuance

Rank Lead Manager Amount $m No of issues Share %
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1 JPMorgan 22,398.41 104 8.67%
2 Morgan Stanley 19,092.40 102 7.39%
3 Citi 17,768.49 110 6.88%
4 UBS 17,693.89 71 6.85%
5 Goldman Sachs 17,256.05 98 6.68%