Citigroup was dropped Thursday from an upcoming $3.4 billion Texas bond sale after being recently barred from underwriting government debt in the state.

The Texas Natural Gas Securitization Finance Corporation board reconstituted the deal’s underwriting syndicate, removing Citigroup as a co-manager.

Last month, the Texas Attorney General’s Office announced it will no longer approve any public security that included Citigroup as a purchaser or underwriter after determining the bank’s firearms policy runs afoul of a state law.

The law, which took effect in September 2021, prohibits state and local government contracts valued at $100,000 or more with companies, including investment banks, that “discriminate” against the firearm industry.

In 2018, Citigroup adopted a commercial firearms policy following a shooting at Marjory Stoneman Douglas High School in Parkland, Florida, that left 17 people dead, igniting demand for tougher gun control.

A spokesman for the investment bank declined to comment on its removal from the bond issue.

The corporation previously dropped UBS as a co-manager for the deal after the bank was put on a list of financial companies found by the Texas comptroller’s office to be boycotting the fossil fuel industry under another 2021 Texas law that has similar contract restrictions.

A study last year said the two Texas laws increase borrowing costs for issuers in the state.

Approval of the bonds by the Texas Bond Review Board was delayed in November pending a review of the deal, which is now on the board’s Feb. 17 meeting agenda.

The taxable bond sale headed by Jefferies will securitize extraordinary costs incurred by Texas natural gas providers during 2021’s Winter Storm Uri, to provide customers with rate relief by extending the period over which they would pay for those charges.