Opportunity and Challenge Assessment
Banks are looking for ways to get more out of their municipal portfolio without sacrificing credit standards, liquidity, or expanding their geographic scope.
Benefits of the Strategy
- Provides a vehicle to efficiently own general market municipals
- Maximizes liquidity and earnings characteristics of owning general market municipals
- Takes advantage of the relative value added of owning general market municipals over bank qualified municipals
The primary difference between bank qualified (BQ) and general market (GM) municipal issues have to do with a $10 million bond issuance limit per year. The BQ & GM designation is not regulatory, nor is it dependent on credit characteristics, or geographic location. Banks with a wholly owned investment subsidiary are able to efficiently purchase GM munis which have a 19:1 supply ratio and higher tax-free yields of up to 100bps versus similar BQ munis.
THE TAYLORED PATH
- SEC registered investment advisor who is the market leader in the strategy
- Dedicated staff that covers the general municipal market
- Dedicated staff to independently grade and monitor municipal issuer credit
- Purchasing power and strong relationships with municipal underwriters to significantly lower transaction costs, improving liquidity and returns
For details on the performance of Taylor Advisors’ investment advisory clients, please contact us at at email@example.com or 502-412-2205.