KBRA Releases the Bank Treasury Newsletter Chart Deck

NEW YORK--()--Kroll Bond Rating Agency (KBRA) releases this month’s edition of the Bank Treasury Newsletter Chart Deck, which highlights the investment strategies that bank treasurers are already using or considering as they plan for an extended period of low rates.

Many of these strategies involve adding duration to the bond portfolio, although a key objective is to have a bond portfolio with low runoff and high yields. Other strategies focus on investments, such as CLOs, priced at the front end of the yield curve, resulting in an attractive interest earning asset given an inverted yield curve and negative term premium for terms out to five years. While the interest rate on excess reserves (IOER) rate, at 1.8%, is still economically compelling as an investment for bank treasurers—assuming the Fed does not cut rates to 0% or even negative—total IOER in the last quarter was just 2% of total interest income.

To view the chart deck, click here

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About KBRA and KBRA Europe

KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical Contacts:

Ethan M. Heisler, CFA, Senior Director
(516) 359-0975
eheisler@kbra.com

Business Development Contact:

Dave DeMilt, Managing Director
(646) 731-3335
ddemilt@kbra.com

Contacts

Analytical Contacts:

Ethan M. Heisler, CFA, Senior Director
(516) 359-0975
eheisler@kbra.com

Business Development Contact:

Dave DeMilt, Managing Director
(646) 731-3335
ddemilt@kbra.com