AA-rated PSF-guaranteed ISD paper trading inside +5 to AAA MMD. Callable 2017 coupons of 4.00–5.00% produce 3–5% PV savings; qualifying current refundings warrant Board authorization now.
District-voted authorization executions remain favorable. Intermediate PSF-enhanced structures clearing at sub-3.50% TIC; front-loaded 5% coupons maximize proceeds for construction draws.
ISDs considering May tax-rate elections should finalize preliminary sizings now. PSF capacity remains ample and the program's credit enhancement delivers 25–40 bps of spread compression versus unenhanced AA paper. Fast-growth districts in I-35 and Houston metro corridors dominate the forward calendar.
Texas negotiated supply ~$1.2B this week, led by two large ISD packages and a water authority revenue deal. Demand is deep for 10–20 year PSF-enhanced maturities; 30-year terms clearing with modest concessions to MMD +15 to +25.
For districts with callable 2015–2017 bonds, execute current refunding analyses immediately. The 2026 refunding window is approaching optimal given muni/UST normalization and front-loaded cut expectations into year-end.
| Meeting | Hold | Cut | Hike |
|---|---|---|---|
| May 2026 | 72% | 26% | 2% |
| Jun 2026 | 48% | 49% | 3% |
| Jul 2026 | 30% | 68% | 2% |
| Sep 2026 | 18% | 80% | 2% |
Implied probabilities derived from 30-Day Fed Fund futures (CME FedWatch).
| Tenor | Current | Δ WoW | Prior Wk | Prior Mo | Prior Yr | 8-Wk Trend |
|---|---|---|---|---|---|---|
| 2Y | 3.95% | -4 bp | 3.99% | 4.10% | 4.72% | |
| 5Y | 4.07% | -2 bp | 4.09% | 4.18% | 4.35% | |
| 10Y | 4.28% | +1 bp | 4.27% | 4.32% | 4.21% | |
| 30Y | 4.52% | +3 bp | 4.49% | 4.47% | 4.35% |
| Tenor | Current | Δ WoW | Prior Wk | Prior Mo | Prior Yr | 8-Wk Trend |
|---|---|---|---|---|---|---|
| 1Y | 2.70% | — | 2.70% | 2.78% | 3.15% | |
| 5Y | 2.85% | -2 bp | 2.87% | 2.94% | 2.98% | |
| 10Y | 3.12% | +1 bp | 3.11% | 3.16% | 2.95% | |
| 20Y | 3.75% | +2 bp | 3.73% | 3.77% | 3.42% | |
| 30Y | 4.02% | +3 bp | 3.99% | 4.00% | 3.68% |