Tuesday, May 15, 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 • Gus Koppen

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
5/08/18	1.69	1.87	2.05	2.26	2.51	2.66	2.81	2.93	2.97	3.04	3.13
5/09/18	1.68	1.88	2.05	2.27	2.54	2.68	2.84	2.96	3.00	3.07	3.16
5/10/18	1.69	1.90	2.05	2.27	2.54	2.69	2.83	2.94	2.97	3.04	3.12
5/11/18	1.68	1.92	2.06	2.28	2.54	2.69	2.84	2.94	2.97	3.03	3.10
5/14/18	1.70	1.93	2.09	2.28	2.55	2.70	2.85	2.96	3.00	3.06	3.13

                                                                                      Source: U.S. Department of the Treasury, as of 05/14/18  

                                                                    

SUPPLY AND DEMAND

 

It would appear that the level of municipal debt issuance is scheduled to have a nice bump up in supply next month. The $13.5 billion scheduled for June would be the largest issuance of the year.  The most since the record-setting December rush.

But the $13.5 billion issuance does not match the $20.2 billion investors are scheduled to receive from securities being paid off.  Analysts indicate that demand from investors looking to reinvest their cash will support the municipal market for the balance of the year, providing tailwinds to a market that’s recovering from the losses suffered at the start of the year.
 

Another area of the market where supply has not kept up with demand are “Bank Qualified” (B.Q.) Midwestern credits.  With interest costs up and advanced refunding’s eliminated by the tax law changes, B.Q. issuance is almost entirely dependent on voter approved debt.  We know how difficult that is to get accomplished in our current political environment.
 

CCB Capital Markets was fortunate to be the sole underwriter of an $8 million G.O. issued by Sedgwick Co. USD #265 (Goddard) Kansas.  The bonds are Aa3 rated and we believe show good value from a historical perspective. As you can see from the chart below, the 3.25% bonds due 10-1-2034 with a 10-1-2026 call yield over 3%.  In fact the 3.15% yield to call and 3.19% yield to maturity are both 105 percent of Treasuries, (traditionally absolute yields above 100 percent are a reliable gauge of value).

We currently offer 2,000,000 in 2034 for May 22^nd settlement.  Please contact your CCB representative for more details.

 
  
                                                                                                                                                         Source:  Bloomberg         
                                                          
        

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