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Wednesday, June 11, 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
06/04/25 4.27 4.35 4.27 4.06 3.87 3.83 3.92 4.13 4.36 4.88 4.88
06/05/25 4.24 4.34 4.26 4.07 3.92 3.90 3.99 4.18 4.39 4.90 4.88
06/06/25 4.23 4.34 4.29 4.15 4.04 4.02 4.12 4.31 4.51 5.00 4.97
06/09/25 4.25 4.35 4.30 4.14 4.00 3.98 4.08 4.27 4.48 4.97 4.94
06/10/25 4.24 4.34 4.30 4.12 4.02 4.00 4.09 4.27 4.47 4.96 4.93

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 6/10/2025.
                                                                                                                                                                                      

Longer Term Municipal Bonds Offer Good Value

We believe longer term municipal bonds continue to offer good value due to increased supply and heightened market uncertainty, especially on the longer end of the yield curve due to worries over the rising federal deficit.  An excellent example is a bond from the state of Missouri issued by the Mount Vernon Missouri School District #R-V.

These bonds are Bank Qualified Unlimited Tax General Obligations.  The underlying rating is A- but the credit enhancement provided by the MO State Aid Direct Deposit Program raises the rating to AA+. Here are the details:     (Detail and availability are subject to change without notice)
 
 
This bond is offered at an after-tax yield to call of 4.25%, implying a price of 105.27.  For an S-Corp (29.6% tax rate), that equates to a TEY to call of 6.03% and a 196 bp spread to TSY.  Since this bond is offered at a premium, these yields all assume the bond is called at the 2030 call date which is a 4.07-year duration.  We believe these are attractive yields and spreads for four-year duration bond investments in today’s market.

It is possible that this bond is not called at the call date and its duration extends out longer.  For other fixed rate bonds such as MBS or Agency Callable, duration extension can be a negative because the investor may now own a below market coupon that could remain outstanding longer than anticipated or projected.  If this particular municipal bond is not called, however, the investor is protected somewhat by earning the 5.50% coupon at 100.00 tax free after the call date since the premium is written off to the call.  This would be a TEY of 7.81% for an S-Corp and 6.96% for a C-Corp post call date.

For further information on this bond or other investment alternatives, please reach out to your Country Club Bank Sales Representative.

 


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