Friday, April 10, 2020 |
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| 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 • 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 |
| 04/03/20 | 0.09 | .010 | 0.15 | 0.15 | 0.23 | 0.30 | 0.39 | 0.52 | 0.52 | 1.05 | 1.05 |
| 04/06/20 | 0.09 | 0.15 | 0.17 | 0.20 | 0.27 | 0.35 | 0.44 | 0.58 | 0.67 | 1.08 | 1.27 |
| 04/07/20 | 0.10 | 0.14 | 0.20 | 0.20 | 0.28 | 0.36 | 0.48 | 0.64 | 0.75 | 1.13 | 1.32 |
| 04/08/20 | 0.14 | 0.22 | 0.24 | 0.23 | 0.27 | 0.34 | 0.47 | 0.65 | 0.77 | 1.18 | 1.37 |
| 04/09/20 | 0.20 | 0.25 | 0.24 | 0.25 | 0.23 | 0.29 | 0.41 | 0.60 | 0.73 | 1.15 | 1.35 |
Municipal Market Credit Impact
There is little doubt that COVID-19 has and will likely continue to impact the municipal market. Long-term issuance has been significantly lower, while secondary trading has been increasingly active. Initially municipal yields surged, as the market digested unpresidented fund outflows liquidity. However, pricing is adjusting upward toward more historical spread levels. Apparent in the large volume of trading, was the markets preference for high quality and essential service debt.
Credit quality has become increasingly important as the market digests the impact of the virus on various sectors. We emphasize municipal credit reviews with our clients on a regular basis; however, here are a few additional considerations when reviewing your portfolio for potential impacts:
Credit quality has become increasingly important as the market digests the impact of the virus on various sectors. We emphasize municipal credit reviews with our clients on a regular basis; however, here are a few additional considerations when reviewing your portfolio for potential impacts:
- States with declining tourism, will lose substantial tax revenue
- Hospitals will lose revenue from elective procedures
- Higher education could see declines in enrollment
- Pensions could strain states, as portfolio returns are significantly lower
- Transportation revenue declines as travel and non-essential daily commuting are halted
- Rising unemployment could lower tax collections
To discuss specific credits within your portfolio, please contact your CCB representative to review your municipal portfolio.
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