Muni Bonds

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Mar 5, 2010 12:30 pm

Does anyone have a resource for finding muni bonds that are available on the street.  Our Bondnet only shows what is in our inventory.  I've got a client looking specifically for Missouri GO's.  He wants AAA and 5% too, but doesn't want to pay a premium.   I've told him those don't exist anymore.  There's got to be more inventory than the 1 AA bond that our traders found for me.  

Mar 5, 2010 12:34 pm

AAA at 5%? How about afree beemer and a date with Lola Falana? It's frustrating sometimes trying to manage client expectations. Mobile AL has a nice AA at about 4.6 at or near par. If he doesn't take that, sell him sone WIN stock

Mar 5, 2010 1:07 pm

www.municipalbonds.com
Go to Missouri
Sort by highest yield

Mar 5, 2010 1:12 pm

May have to go out of state for that.

Unrelated: Jones has an interesting marketing piece on the safety of municipal bonds. For the past 25 years, AAA rated munis have never defaulted, AA rated have 00.30% chance of default.

He might wanted to consider an AA rated bond. Or even an insured AA rated bond.

Mar 5, 2010 1:19 pm

GetHard,
One of the BIG misconceptions among retail FA's:
"For the past 25 years, AAA rated munis have never defaulted, AA rated have 00.30% chance of default."
This may be a technically accurate statement.  But all those stats about the % of different rated muni's that default (or any bonds for that matter).....doesn't factor in the bonds that have been downgraded prior to defaulting.  So a bond starts out as AA, they get in trouble, get downgraded, and then default.  Guess what?  That "AA Rated" muni didn't default.
I have no idea how often this happens, but it has happened.

Mar 5, 2010 1:32 pm

Good point, that never crossed my mind.

Mar 5, 2010 1:33 pm

Of course most clients think you're referring to some auto association anyway...

Mar 5, 2010 1:44 pm

B24- thanks for the website. 
navet - I didn't mention that he also doesn't want anything with a 10+ year maturity.  And he'd like his interest in his bank account on the day it is paid. 
GetHard - I chuckle everytime I hear someone say that about muni bonds.  FWIW, I agree with you on the AAA vs AA issue.  That small a percent of risk of default makes the slightly lower risk acceptable to most folks.  Except this guy.  I stopped trying to explain to him that those credit ratings are worth the paper they're printed on these days because Moody's, S&P, and Fitch are so far behind on their reviews.  You might be buying a AAA in the secondary market, but in reality you'd find that the bond is really an A or worse because of the economy.   

Mar 5, 2010 3:56 pm

Sounds like a candidate for a goodnight.

Mar 5, 2010 4:05 pm

Spiff you have some real winners for clients. Have you done a goodnight yet ? If you havent why not ?

Mar 5, 2010 4:25 pm

Does anyone have a resource for finding muni bonds that are available on the street.  Our Bondnet only shows what is in our inventory.  I've got a client looking specifically for Missouri GO's.  He wants AAA and 5% too, but doesn't want to pay a premium.   I've told him those don't exist anymore.  There's got to be more inventory than the 1 AA bond that our traders found for me.  

 
 
I did a quick search and I have 10 issues that are AAA in Missouri and 97 that are AA or AAA. There were a few that were actually close to that 5....4.40...4.50 YTM... Of course our inventory at LPL is the Street's inventory. Best of luck to you!

Mar 8, 2010 9:52 am

Spiff you have some real winners for clients. Have you done a goodnight yet ? If you havent why not ?

 
 
I haven't done a GKN yet.  Not quite ready for it.  I'm thinking in the next couple of years I'll be ready.  You guys only get to hear about the really good clients.  My others don't give me much trouble. 

Mar 19, 2010 4:38 pm

Today on BondNet:

MO muni cpn=4.65%

AA rated Insured.

selling at 102.00

Mar 26, 2010 11:19 pm

I'm just gonna throw this out there, but have you looked at Closed End Muni bond funds for your clients Muni needs?  I have been selling a bit of NVP lately, trades like a stock, tax free income, and currently yielding 5% for my Virginia clients.  Average credit rating in the VA bond fund is AA but it gives my investors alot more freedom than the rigid bond numbers, they can buy more exact dollar amounts in shares.  Oh, another of the best parts It's a monthly check.

There is an MO bond fund, you can look up the numbers on it.  Symbol NOM

Mar 27, 2010 12:21 pm

Be careful of those leveraged muni funds in the future when rates rise it might not be so comfortable for your clients to be in.  They will probably perform well for another 6 months or perhaps a year, but I wouldn't want conservative clients in them after that.

I would just advise you to switch to a firm that has a good inventory of bonds.  At WFA we have the bonds from the street plus our own inventory.  That client just sounds ridiculous--you won't find one that is 5% and 10 years or less!  A year or so ago you could find some great bonds, but now it is a little tougher, but it sounds like the inventory that Jones gives you is pathetic.

Mar 30, 2010 10:52 am

Never mind.  That client that I was dealing with got pissed off because I didn't have what he was looking for, so he moved his account to another Jones office closer to his house. 

One less client to GKN.