Thursday, August 27, 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 • David Farris |
| 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 |
| 08/20/20 | 0.08 | 0.11 | 0.13 | 0.12 | 0.13 | 0.15 | 0.26 | 0.46 | 0.65 | 1.15 | 1.38 |
| 08/21/20 | 0.07 | 0.10 | 0.12 | 0.13 | 0.16 | 0.16 | 0.27 | 0.46 | 0.64 | 1.13 | 1.35 |
| 08/24/20 | 0.09 | 0.12 | 0.12 | 0.14 | 0.14 | 0.18 | 0.28 | 0.47 | 0.65 | 1.14 | 1.35 |
| 08/25/20 | 0.08 | 0.11 | 0.12 | 0.13 | 0.15 | 0.18 | 0.30 | 0.49 | 0.69 | 1.18 | 1.39 |
| 08/26/20 | 0.08 | 0.11 | 0.12 | 0.12 | 0.16 | 0.18 | 0.28 | 0.50 | 0.69 | 1.20 | 1.41 |
Source: U.S. Department of the Treasury, as of 08/26/2020
Value in Municipal Sector
When speaking of the bond market as a whole, most investors quote US Treasuries as it relates to value and/or the shape of the yield curve. US Treasuries are seen as the most liquid asset within the fixed income market and due to the marketability and price transparency, different asset classes use these benchmarks as a comparison for spread or value. As the Treasury market moves up or down, other sectors of the market (MBS, Municipals, Agency Debentures, etc.) may or may not move at the same pace. For example: Year-over-Year (YoY) the yield on the 10YR Treasury go from 1.54% (8/26/19) to 0.68% (8/26/20) – an 86bps drop. Comparatively, the AAA Taxable GO Municipal Curve YoY* went from 2.07% (8/26/19) to 1.47% (8/26/20) – a 60bps shift downward. If the 10YR AAA Taxable Curve was used in comparison to the 10YR USTN, one year ago the quoted Taxable GO was offered at 134% of Treasury and today it is offered at 216% of Treasury. Although bond prices have risen YoY, it should be recognized that this sector offers more spread in comparison.
Levelland ISD, TX
Value in Municipal Sector
When speaking of the bond market as a whole, most investors quote US Treasuries as it relates to value and/or the shape of the yield curve. US Treasuries are seen as the most liquid asset within the fixed income market and due to the marketability and price transparency, different asset classes use these benchmarks as a comparison for spread or value. As the Treasury market moves up or down, other sectors of the market (MBS, Municipals, Agency Debentures, etc.) may or may not move at the same pace. For example: Year-over-Year (YoY) the yield on the 10YR Treasury go from 1.54% (8/26/19) to 0.68% (8/26/20) – an 86bps drop. Comparatively, the AAA Taxable GO Municipal Curve YoY* went from 2.07% (8/26/19) to 1.47% (8/26/20) – a 60bps shift downward. If the 10YR AAA Taxable Curve was used in comparison to the 10YR USTN, one year ago the quoted Taxable GO was offered at 134% of Treasury and today it is offered at 216% of Treasury. Although bond prices have risen YoY, it should be recognized that this sector offers more spread in comparison.
Take a look at the following AAA PSF Taxable GO’s offered at over 250% of the corresponding US Treasury Note (USTN).
Levelland ISD, TX- TAXABLE Unlimited General Obligation
- A+ Underlying Rating
- AAA PSF Guaranteed Rating
- Assessed Value: $1,205,340,342
- Direct Debt to Assessed: 3.84%
- D&O Debt to Assessed: 4.57%
- Population: 14,470
- Direct Debt Per Capita: 2,652
- D&O Debt Per Capita: 3,150
- Settlement 9/29/2020
1,025M Available: 0.00% Coupon Due 2/15/29 Non-Callable @ 1.55% YTM (271% of USTN)
375M Available: 0.00% Coupon Due 2/15/30 Non-Callable @ 1.65% YTM (259% of USTN)
Offerings are subject to availability and/or change in price. (Indication Only)
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