| Friday, April 14, 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 |
| 04/07/23 | 4.46 | 4.86 | 4.92 | 4.61 | 3.98 | 3.75 | 3.50 | 3.45 | 3.40 | 3.73 | 3.61 |
| 04/10/23 | 4.42 | 4.99 | 4.93 | 4.66 | 4.01 | 3.78 | 3.52 | 3.47 | 3.42 | 3.74 | 3.63 |
| 04/11/23 | 4.11 | 4.99 | 4.96 | 4.67 | 4.03 | 3.78 | 3.53 | 3.48 | 3.43 | 3.74 | 3.62 |
| 04/12/23 | 4.05 | 5.01 | 4.94 | 4.66 | 3.96 | 3.69 | 3.46 | 3.43 | 3.39 | 3.74 | 3.63 |
| 04/13/23 | 3.77 | 5.00 | 4.93 | 4.66 | 3.97 | 3.71 | 3.50 | 3.47 | 3.45 | 3.79 | 3.69 |
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 04/13/2023
Liquidating Municipal Bonds as a Source of Funding
Since late October of 2022, we have seen a dramatic drop in yields across the curve. Municipal bonds in particular have outperformed other fixed-income sectors due to a combination of low new-issue supply and strong demand from tax-exempt funds and retail buyers. As shown in the graph below, since October 24, 2022, generic AA municipal yields have dropped 86 basis points in 2 years, 116 basis points in 5 years, and 126 basis points in 10 years.
Secondary bids for good quality municipals have been exceptionally strong for those maturing within ten years and bearing coupons in the 3.00-5.00% range. We continue to see this as an excellent opportunity for banks seeking liquidity. We have witnessed high-grade munis with a 5-year maturity receive bids this week as strong as a 2.37% net give-up yield. For a Sub-S bank in the roughly 30% tax bracket, this equates to a taxable give-up yield of 3.39%, a rate currently lower than the 5 year Treasury and a clearly competitive cost of funds. Whether selling municipals as a source of funding or to swap into other fixed-income products at higher yields, we encourage you to consider taking advantage of this current opportunity. Please let us know if you would like us to take a look at your portfolio and identify your strong sale candidates.
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