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Wednesday, December 18, 2024
 

MANAGING DIRECTOR:
Scott Carrithers
 
PORTFOLIO SALES AND SERVICE:
Chris Thompson • Sean Doherty • Kevin Doyle • Mark Tranckino • Brian Schaff
Natalie Regan • Aaron Stoffer • David Farris • Jeff Macy 
Josh Kiefer • Tom Toburen • 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
12/11/24 4.37 4.36 4.32 4.20 4.15 4.12 4.14 4.20 4.27 4.56 4.48
12/12/24 4.32 4.33 4.31 4.22 4.19 4.16 4.18 4.25 4.33 4.62 4.55
12/13/24 4.30 4.33 4.32 4.24 4.25 4.22 4.25 4.33 4.40 4.68 4.60
12/16/24 4.31 4.31 4.32 4.24 4.25 4.23 4.26 4.33 4.40 4.67 4.60
12/17/24 4.33 4.33 4.31 4.25 4.25 4.23 4.26 4.33 4.40 4.68 4.59

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 12/17/2024.

                                                                                                                                                                                        

You might want to find liquidity for this….
 
Big day today, well not really considering the FOMC typically telegraphs their move well ahead of the announcement.  Expectation is for another 25 BPS ease taking the range to 4.25% - 4.50% which would be a full percentage point lower than the recent cycle high.

You can interpret that however you want because today we are going to highlight a bond structure that should perform well if they lower rates, do nothing or surprise everyone and hike again. 

History would suggest that we are near the top of the cycle and rates are going lower therefore we should be pushing our assets out on the curve.  We found a way to do that while also protecting ourselves in the event of a dramatically different outcome.  Please see the bullet points below and reach out with any interest or thoughts. 

Thank you and Merry Christmas from all of us at Country Club Bank!
 
FNMA Deep Discount Seasoned ARM ~4YR’s to first adjustment
  • You are looking at ~5% Yield for the remaining fixed term of ~4YR’s (assuming full accretion of
    ~8 point discount)
  • Currently well over 5.50% for the life of the bond
  • This will reset to SOFR + 237 BPS in 48 months then every 6 months thereafter
  • 5/1/5 CAP meaning this can reset up to 500 BPS at first reset
  • Most important is the DEEP DISCOUNT which will most likely add duration (a good thing in a down cycle) and any early prepays just act as a Yield Enhancer due to early accretion
  • If you have already closed your books we can offer this for January settlement as well
     
Yield Table for Life (assuming no change in SOFR)


Source: Bloomberg, LP                                                                                                                                                                                                           


Yield Table to First Reset in ~4YR’s


Source: Bloomberg, LP                                                                                                                                                                                                           



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