While the term “normal yield curve” refers to a positively sloping yield curve, the marketplace has become accustomed to an inverted yield curve for quite some time. The treasury curve, from the 6-month to 30-year point, has been inverted since September 2022. We’ve seen this create a benefit for issuers

A significantly inverted treasury yield curve with elevated short-term rates continues to persist in the market. As a result, many issuers and conduit borrowers are finding the opportunity to earn positive arbitrage on their bond proceeds.  The Tax Reform Act of 1986 established arbitrage restrictions and rebate requirements for tax-exempt

Fitch Ratings downgraded the United States’ long-term debt from AAA to AA+ on August 1st. This is the first rating downgrade the United States has faced in over a decade since S&P downgraded its credit rating from AAA to AA+ in August 2011. Both Moody’s and Kroll continue to hold

The Federal Reserve raised interest rates again this week by 0.25%, bringing borrowing costs to their highest levels in over 22 years. While it’s possible that rates could be increased again in the next Fed meeting in September, the current market census (according to the Bloomberg Weighted Average Fed Target

President Biden signed the Fiscal Responsibility Act of 2023 bill this weekend, suspending the debt limit through January 1, 2025. As a result, the sale of State and Local Government Securities (SLGS) resumed yesterday, June 5th, as of 12pm ET.  As a reminder, whether or not the SLGS window is

The government took the “extraordinary measure” of suspending the selling of State and Local Government Securities (SLGS) effective on May 2, 2023 at 10:00a.m. ET.   Learn more in our Basis Points article: ‘Special Announcement: SLGS Window Closed This Week’   Want to discuss further? Contact: Georgina Walleshauser, Vice President,

The Federal Reserve raised interest rates again last month by 0.25% and we continue to see a significantly inverted treasury yield curve. As a result, issuers can benefit from reinvesting bond proceeds and lock-in higher short-term investment rates. For tax-exempt borrowers who are coming to market with new money issuances,

At Blue Rose, we’re seeing many issuers are evaluating the trade-off between risk and return associated with Guaranteed Investment Contracts (“GICs”) for the investment of bond proceeds. While both a repurchase agreement (“repo”) and GIC can offer the certainty of a fixed rate of return, capital preservation, and intended liquidity,

As expected, the U.S. government’s debt limit was reached today. Treasury Secretary Janet Yellen identified this situation in a letter to Congress last week. When this situation occurs, the Treasury usually takes certain “extraordinary measures” to mitigate the increase of debt such that debt levels remain under the debt ceiling.

In 2022, short-term interest rates rose significantly. This was an obvious trend that captured many headlines throughout the year. What may have been less apparent to market participants was the fact that about mid-way through the year, we began seeing consistent opportunities for positive arbitrage between 20-year tax-exempt borrowing rates