Recently, some of our clients have been utilizing a “rollover” laddered portfolio investment strategy for their debt service reserve funds (“DSRF”). Specifically, this approach is often attractive to small borrower clients because the total fees associated with structured investment products such as a repurchase agreement or guaranteed investment contract can

By design, the yields on State and Local Government Series (SLGS) securities are slightly lower than the yields on open market securities (OMS). This often encourages issuers to bid OMS for refunding escrows rather than using SLGS, for a higher portfolio yield and a lower cost to fund a defeasance

The shape of the yield curve in the current market continues to remain relatively flat, with minimal differences between short-term rates and long-term rates compared to historical levels. Additionally, interest rates have been declining to significantly low levels. At the end of June, the 10-year swap rate was the lowest

The debt ceiling for the United States is currently suspended until March 1, 2019 and at that time, it will be set to the amount of debt on that day. Once that new limit is set, by design, the Treasury department will be legally prohibited from incurring any additional debt.

With the SLGS window currently closed and expected to remain so for several more months, issuers of current refunding transactions should consider using open market securities escrows. In recent years many issuers correctly believed that for shorter dated escrows it was often more cost effective to gross fund the escrow