Bondholder gains from the annexation of Texas and implications of the US bailout

The fate of distressed Republic of Texas debt offers a rare example of bondholder gains associated with state annexation. While soaring in hopes of a US bailout, Texas debt prices remained well below par and never seemed to presume full repayment, however. The fluctuations of the Texas debt on the Philadelphia Stock Exchange over the 1845–1855 period between annexation and final settlement feature structural breaks typically connected with either actual legislation or rumors of pending action. Negative turning points follow when US legislative initiatives in 1845 and 1850 failed to yield a quick resolution of the Texas debt.