Thursday, January 25, 2018
MANAGING DIRECTOR: Scott Carrithers   PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Kevin Doyle • Lonnie Harris •  Mark Tranckino • Robert Schuyler • Tom Toburen • Josh Kiefer  Nicole Burczyk • Kelley Frye • Natalie Regan • Aaron Stoffer • Chuck Honeywell

US Treasury Market
Date	1 mo	3 mo	6 mo	1 yr	2 yr	3 yr	5 yr	7 yr	10 yr	20 yr	30 yr
1/18/18	1.29	1.45	1.63	1.79	2.05	2.17	2.43	2.55	2.62	2.77	2.90
1/19/18	1.28	1.44	1.62	1.79	2.06	2.20	2.45	2.57	2.64	2.78	2.91
1/22/18	1.27	1.44	1.65	1.79	2.08	2.21	2.46	2.59	2.66	2.79	2.93
1/23/18	1.26	1.44	1.63	1.78	2.06	2.18	2.43	2.55	2.63	2.77	2.90
1/24/18	1.25	1.43	1.63	1.79	2.08	2.20	2.43	2.57	2.65	2.80	2.93

                                                                                       Source: U.S. Department of the Treasury, as of 1/24/18  

Do You Have Enough Cash Flow?

As we all know, higher rates often time’s means fewer cash flows out of our bond portfolio as anything with an option will tend to move out on the curve.  Many of us are experiencing this now as the front end of the curve continues to move higher in yield.

This correlation is why we have been recommending 10YR and Seasoned 15YR pools for years.  These structures along with Agency ARM’s have continued to kick off strong cash flows allowing you to reprice your cash in to a higher yielding loans or bonds. 

The recommendation hasn’t changed however the yields have moved substantially higher and the premiums have fallen to much more tolerable levels.  Below is an example of a seasoned 15YR 3.00% Coupon pool which offers yields we have not seen for a very long time.  Along with these higher yields you still maintain the limited extension risk meaning consistent cash flows even if rates continue to move higher. 

The following Yield Table highlights some of the important characteristics of the seasoned FNMA 15YR 3.00% Coupon pool.  Please reach out to your CCB representative if you would like to discuss in more details.  Roughly 5MM remain for 2/15/18 Settle.

                                                                                                                                                                                                                                                              Source: Bloomberg LLC as of 1/24/2018

This information is intended for institutional investors only. The material provided in this document/presentation is for informational purposes only and is intended solely for private use. Past performance is not indicative of future results. This material is not intended as an offer or solicitation for the purchase or sale of any financial instruments.

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