| Friday, May 12, 2023 |
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MANAGING DIRECTOR: |
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US Treasury Market |
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| Date | 1 mo | 3 mo | 6 mo | 1 yr | 2 yr | 3 yr | 5 yr | 7 yr | 10 yr | 20 yr | 30 yr |
| 05/05/23 | 5.39 | 5.22 | 5.07 | 4.75 | 3.92 | 3.64 | 3.41 | 3.41 | 3.44 | 3.84 | 3.75 |
| 05/08/23 | 5.36 | 5.21 | 5.05 | 4.81 | 4.00 | 3.72 | 3.49 | 3.49 | 3.51 | 3.91 | 3.82 |
| 05/09/23 | 5.46 | 5.21 | 5.14 | 4.84 | 4.02 | 3.73 | 3.50 | 3.50 | 3.52 | 3.93 | 3.84 |
| 05/10/23 | 5.45 | 5.22 | 5.09 | 4.71 | 3.91 | 3.58 | 3.39 | 3.41 | 3.44 | 3.87 | 3.80 |
| 05/11/23 | 5.46 | 5.16 | 5.09 | 4.74 | 3.90 | 3.56 | 3.36 | 3.36 | 3.39 | 3.82 | 3.74 |
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 05/11/2023
TWO YEAR OKLAHOMA TAXABLE GENERAL OBLIGATIONS BONDS AT 5.00%
Last week, we wrote in this publication about the heavy issuance of municipal bonds currently taking place in Oklahoma and the opportunity that this presents. To expand a little further, Oklahoma statues require school districts within the state to have no more than 10% of their assessed valuation outstanding in bonded indebtedness at any given time. This effectively forces the school districts to roll their debt over rapidly and access the bond market on a far more frequent basis than other municipalities. Ad valorem taxes, which go directly into the bond sinking funds of the districts, are collected twice annually with the full amount due by April 1 therefore the heaviest bond issuance tends to fall in April through June of each year. This year has been no exception.
What HAS been an exception this season, however, is the ability of Oklahoma banks to absorb all of this issuance. Traditionally, the majority of Oklahoma school bonds are purchased by Oklahoma banks, but asset-liability challenges have impacted their ability to purchase all of the supply this year. Financial advisors have recognized that it is not cost effective to pay for a national service rating for all but the largest of these districts, so these issues are largely ignored by underwriters outside of the region.
Country Club Bank has already underwritten 31 Oklahoma issues this year, both bank qualified and taxable, many with a taxable equivalent yield of 5.00% or better for bonds maturing in 2-5years. With the current two-year treasury at 3.91 and the five-year yielding 3.36, we believe this is an exceptional spread. Yesterday, we were the successful bidder for $9,460,000 Canadian County ISD No. 22 (Piedmont Board of Education). The bonds carry an OK#1 rating, mature on 7/1/2025 and yield 5.00. The offering flyer below highlights the district’s solid financials. Whether you are within the state of Oklahoma or in a nearby state, we encourage you to be aware of this opportunity to book above average yield on short, quality general obligation bonds. Please let us know if we can help.
What HAS been an exception this season, however, is the ability of Oklahoma banks to absorb all of this issuance. Traditionally, the majority of Oklahoma school bonds are purchased by Oklahoma banks, but asset-liability challenges have impacted their ability to purchase all of the supply this year. Financial advisors have recognized that it is not cost effective to pay for a national service rating for all but the largest of these districts, so these issues are largely ignored by underwriters outside of the region.
Country Club Bank has already underwritten 31 Oklahoma issues this year, both bank qualified and taxable, many with a taxable equivalent yield of 5.00% or better for bonds maturing in 2-5years. With the current two-year treasury at 3.91 and the five-year yielding 3.36, we believe this is an exceptional spread. Yesterday, we were the successful bidder for $9,460,000 Canadian County ISD No. 22 (Piedmont Board of Education). The bonds carry an OK#1 rating, mature on 7/1/2025 and yield 5.00. The offering flyer below highlights the district’s solid financials. Whether you are within the state of Oklahoma or in a nearby state, we encourage you to be aware of this opportunity to book above average yield on short, quality general obligation bonds. Please let us know if we can help.
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