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Housing Bonds

“Housing bonds” are a special category of municipal bonds, and they may provide a substantial yield advantage to investors of, say, from one-half to three-quarters of a tax-advantaged percentage point over “vanilla-type” munis. Housing bonds generally have a higher yield because they carry the risk of early and unpredictable calls, and investors need to be rewarded for taking on this risk.

Housing bonds are issued by a Housing Finance Authority to raise funds to make mortgages for large housing projects or for single-family housing. Multi-family and Single-family housing bonds have distinct differences of which you should be aware. But the key to prudent investing in these potentially attractive muni bonds is calculation up front of the effects of an early call, to be sure that the yield advantage is not eliminated by the early call.

Click for Housing Bonds PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

Interest Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14
today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Housing Bonds

“Housing bonds” are a special category of municipal bonds, and they may provide a substantial yield advantage to investors of, say, from one-half to three-quarters of a tax-advantaged percentage point over “vanilla-type” munis. Housing bonds generally have a higher yield because they carry the risk of early and unpredictable calls, and investors need to be rewarded for taking on this risk.

Housing bonds are issued by a Housing Finance Authority to raise funds to make mortgages for large housing projects or for single-family housing. Multi-family and Single-family housing bonds have distinct differences of which you should be aware. But the key to prudent investing in these potentially attractive muni bonds is calculation up front of the effects of an early call, to be sure that the yield advantage is not eliminated by the early call.

Click for Housing Bonds PDF

If your portfolio is greater than $500,000, Sharon Alister can provide a free analytic review to help ensure that your portfolio is in line with your investment goals. Call Sharon Alister at (800) 745-7110 or email info@AlisterTalksBonds.com

 

Interest Rates (Indications only)

Please note the rates for Ins’d and Pre-Res are not available from Bloomberg and will be updated as soon as possible.

Treasuries AAA Munis
3mo 1.815 N/A
6mo 2.009 N/A
1yr 2.237 1.74
2yr 2.482 1.87
5yr 2.809 2.19
10yr 2.970 2.53
30yr 3.145 3.14
today's rates chart

AAA Rated Munis

Pre-Res Ins’d Pure*
2 yr 1.91 2.05 1.87
5 yr 2.23 2.49 2.19
10 yr N/A 2.89 2.53
15 yr N/A 3.20 2.82
30 yr N/A 3.50 3.14

*Rated AAA on its own
Source: Bloomberg

Investing involves risk, including possible loss of principal. When investing in bonds, it is important to note that as interest rates rise, bond prices will fall. Conversely, as interest rates fall, bond prices will rise.

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