Tuesday, October 17, 2017
MANAGING DIRECTOR: Scott Carrithers   PORTFOLIO SALES AND SERVICE: Steve Panknin • George Morris • Jeff Goble • Chris Thompson • Sean Doherty Robert Brickson • 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
10/10/17	1.03	1.08	1.26	1.42	1.51	1.64	1.95	2.18	2.35	2.65	2.88
10/11/17	1.04	1.10	1.25	1.40	1.51	1.66	1.95	2.17	2.35	2.64	2.88
10/12/17	.99	1.09	1.27	1.41	1.51	1.66	1.95	2.16	2.33	2.62	2.86
10/13/17	.97	1.09	1.26	1.39	1.51	1.64	1.91	2.12	2.28	2.58	2.81
10/16/17	.97	1.10	1.24	1.42	1.54	1.68	1.95	2.15	2.30	2.58	2.82

                                                                                                               

                                                                                                                Source: U.S. Department of the Treasury, as of 10/16/17   
 

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  A Taxable Municipal Bond with a Twist

Looking for yield in the bond market without sacrificing credit? Taxable municipal bonds have historically offered investors an opportunity to pick-up yield versus other fixed rate security options.

The following case in point is a taxable municipal bond with a twist that provides investors with additional earnings over offerings of similar maturities. The twist is a mandatory sinking fund established to retire a percentage of the bonds each year once the sinking fund comes into effect.

As you can see from the yield table below, the yield on the security increases each year following the initial sink date of 2025. Therefore the bond holder is compensated for the inconvenience of having a portion of their bonds retired prior to maturity.

Sedgwick County Kansas School District #259 Wichita Schools
Build America Bonds
Unlimited Tax GO
Coupon: 6.22%
Maturity Date: 10/01/2028
Sinking Fund beginning 10/01/2025  Yield to 2025 sink: 2.52% (13%)
Yield to average life: 3.00% (4/28/2027)
Yield to maturity: 3.317%
Dollar price: 126.47
Taxable Federal and State
Principal will be retired by lot as follows: 13% 10/1/25; 34% 10/1/26; 36% 10/1/26; 17% 10/1/27
S&P rating is AA and stable / Moody’s rating is Aa2

With a 3% yield to the average life and a 3.31% yield to maturity, this bond has some advantages that typical fixed rate securities don’t offer.

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.

•Not FDIC Insured •No Bank Guarantee •May Lose Value