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Tuesday, April 27, 2021
 

MANAGING DIRECTOR:
Scott Carrithers
 

PORTFOLIO SALES AND SERVICE:
George Morris • Chris Thompson • Sean Doherty • Kevin Doyle • Mark Tranckino
Jeff Goble • Nicole Burczyk • Natalie Regan • Aaron Stoffer • David Farris • Lonnie Harris
 Brian Schaff • Josh Kiefer • Robert Schuyler • Tom Toburen • Aaron Hemphill


 
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
04/20/21 0.01 0.03 0.04 0.07 0.15 0.31 0.81 1.25 1.58 2.16 2.27
04/21/21 0.00 0.03 0.04 0.07 0.15 0.32 0.81 1.24 1.57 2.16 2.26
04/22/21 0.02 0.03 0.04 0.06 0.16 0.32 0.81 1.24 1.57 2.13 2.24
04/23/21 0.01 0.03 0.03 0.07 0.16 0.34 0.83 1.26 1.58 2.14 2.25
04/26/21 0.02 0.03 0.04 0.06 0.18 0.35 0.85 1.27 1.58 2.13 2.24
                                                                                                                                                                  Source: U.S. Department of Treasury as of 4/26/2021


A Defensive Structure Designed to Win
 
This canary step-up security is structured with the idea rates will be moving higher during the term of the bond. The three possible coupon changes are designed to be defensive in a rising rate environment.  As you can see from the information below, the first two coupon periods occurring within the first five years are subject to quarterly calls which begin in six months. The last coupon change is a bullet, or non-callable period, until the maturity date. 

Federal Home Loan Bank
Maturity date 11/17/2028
Coupons:
  • 1.00% to 05/17/2024 (3 years) 
    Callable quarterly beginning 11/17/2021 
    Yield to any call during first three years is 1.00%
    (a 3 year callable is currently 0.37%)
     
  • 1.50% to 05/17/2026 (2 years)  
    Callable quarterly to 05/17/2026 
    Yield to call on 5/17/2026 is 1.196% 
    (a 5 year callable is currently 1.00%)

If not called by 5/17/2026, bond steps to:
  • 2.75% coupon to 11/17/2028 for 2.5 years non-callable
    (a 2.5 year bullet is currently 0.25%)

Bonds are offered at par
Yield to call on 11/17/21 is 1.00% (first call)
Yield to call on 05/17/2026 is 1.196%
Yield to maturity is 1.69%




 


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