Texas AG says Barclays no longer permitted to underwrite state’s municipal bonds

The Office of the Attorney General of Texas announced that Barclays would no longer be permitted to underwrite Texas’s municipal bonds after failing to respond to requests for information concerning its “net zero” carbon emissions commitments. In an All Bond Counsel letter sent by the Office of the Attorney General on November 1, Barclays was identified as having a standing letter with the OAG while also being a Net Zero Alliance member or affiliate. This raised concerns that Barclays’ activities may require it be classified as a “fossil fuel boycotter” under Texas law. When asked for more information concerning its ESG commitments, Barclays elected not to respond to the questions and acknowledged that by doing so it would likely forfeit its ability to contract with Texas governmental entities. Therefore, in accordance with Texas law, the OAG’s Public Finance Division issued an All Bond Counsel Letter explaining that, “until further notice, we will not approve any public security issued on or after today’s date in which Barclays purchases or underwrites the public security or is otherwise a party to a covered contract relating to the public security.” Additionally, the letter notes, “As of today, we have not heard from any of the remaining banks under review that they will not be able to respond to our inquires.”