Texas has earned the lowest interest rate it ever has received on its annual sale of short-term notes.

The state’s sale of $5.5 billion in Tax and Revenue Anticipation Notes (TRANs) achieved an interest rate of 0.48 percent.

Comptroller Susan Combs says this is the most favorable rate Texas has experienced in its history. The $5.5 billion in TRANs were sold on Tuesday, Aug. 25. The short-term debt will be repaid by Aug. 31, 2010 based on anticipated future tax revenues.

“Buyers bid more than $28 billion to obtain a portion of the $5.5 billion in notes Texas offered for sale Tuesday. That is more than five times the amount available for purchase. The high demand for Texas’ high-quality notes drove the interest rate down to its historic low,” Combs says.

Texas will use the proceeds from the sale of debt to distribute state funding to public schools. Proceeds also will be used to manage the state’s cash flow between the start of the fiscal year and the arrival of tax revenues later in the fiscal year.

Moody’s Investors Service Inc., Standard & Poor’s and Fitch Ratings Inc. each previously assigned its highest rating to Texas’ short-term debt.