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Friday, August 29, 2025
 

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Chris Thompson • Sean Doherty • Mark Tranckino • Brian Schaff
Natalie Regan • Aaron Stoffer • David Farris • Jeff Macy 
Josh Kiefer • Todd Czinege • Trey Valentine • Cody Kreutziger

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
08/22/25 4.32 4.19 4.04 3.88 3.70 3.65 3.76 3.98 4.26 4.84 4.88
08/25/25 4.34 4.20 4.04 3.89 3.73 3.67 3.79 4.00 4.28 4.86 4.89
08/26/25 4.30 4.18 4.02 3.86 3.68 3.62 3.74 3.97 4.26 4.88 4.92
08/27/25 4.30 4.18 4.00 3.84 3.61 3.58 3.70 3.93 4.24 4.87 4.92
08/28/25 4.31 4.18 4.01 3.86 3.63 3.59 3.69 3.91 4.21 4.83 4.88

The data in the table above is static as of the time it was pulled, so rates may have changed. Treat all data in this table and PMR as indications only and availability is always subject to change. This information was pulled manually from sources we believe to be reliable. New source, as of 12/12/2022, Bloomberg, L.L.P.  As of: close of business 08/26/2025.
                                                                                                                                                                                      


Deeply Discounted Municipal Bonds

Earlier this week we sent out a Portfolio Managers Report titled “Deep Discount Agency ARMs” highlighting the risk/return profile of discounted ARMs. A product we believe is a great fit for bank balance sheets and something we’ve seen a lot of customers interested in.  Today, we are going to try to make a bit of an apples to oranges comparison and include deeply discounted Municipal Bonds in that conversation. There are a few hoops we need to jump through before we can compare the total return profiles though, the first of which is taxes.

Without getting too far into the weeds, the important thing to understand on discounted municipals is that the accretion of the discount is taxable income and therefore lowers the tax-free yield AND the taxable equivalent yield.

Generally, yield on discounted Muni = coupon income + accretion of discount. (Interest/coupon income will always be tax free, so the adjustment comes from the tax treatment of the discount)

Here's an Example:
 
215m Dodge City, KS UTGO BQ - 1.20 coupon   9-1-2033 Maturity   Callable 9-1-2028
Offered at 4.30 Yield to Maturity (Pre-Tax) $79.184
 


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