Client Summary 031309 PPT


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Client Summary 031309 PPT

  1. 1. MainLine West Introduction for clients specialists in municipal bond investments
  2. 2. municipal bond specialists products and services A broker/dealer focusing on institutional An alternative investment opportunity level service for our clients. providing high tax-exempt income. MainLine West specialists in municipal bond investments
  3. 3. broker/dealer services: institutional level access for investors trust opportunity value • 70 years combined municipal • Diversification of credit • Complimentary portfolio review bond market experience • Risk management • Institutional access = better • Transparent fee structure bonds at better prices • Principal protection • Competent, attentive service • Client-focused philosophy • Tax/income considerations • Fair and modest markups • Clear and concise reporting • Unique duration/maturity • Preferential bond selection MainLine West specialists in municipal bond investments
  4. 4. broker/dealer services: institutional level access for investors municipal bond issuers MainLine selects bonds from among those offered by 50 underwriters with whom we investment bank / underwriters have relationships for the most Sell bonds on behalf of issuer to MainLine West & Institutional Investors attractive credit quality and price. MainLine bond selections are not institutional brokers mainline west available to all retail brokerages. - Purchase bonds from investment bank @ 98.5 municipal securities - Offer bonds to retail brokerage @ 99.5 We have access to the best bonds - Purchase bonds from investment bank @ 98.5 available. - Sell bonds to MainLine client @99.0 (0.5 mark-up) retail brokerage Our mark-up is modest compared to retail, and based on a price less - Sell bonds to retail client @101.5 than available from retail. mainline west clients retail clients Bonds we select are desirable. $1 million par purchase $1 million par purchase @ 101.5 They are attractive to retail Total cost to acquire: $990,000 Total cost to acquire: $1,015,000 brokerage as well as our clients. UP-FRONT COST SAVINGS FOR MAINLINE CLIENTS = $ 25,000 MainLine West specialists in municipal bond investments
  5. 5. broker/dealer services: helping optimize the client’s portfolio - example Portfolio and Investor Profile: National investor, state of residency has no income tax, a Yield % of Portfolio Credit Quality & portion of the portfolio is invested in tax-exempt mutual funds . Portfolio value = $10MM Increase Portfolio Pick-up Comments Issue: Bonds are from high income tax states, which make good investment sense for a resident of that state. This national investor does not enjoy the after tax advantage, and lose income as these Some improved states provide lower yields due to high in state demand. 0.20% 15.65% 0.02% from A to AA Enhancement Opportunity: Substitute specialty state bonds for like quality national trading states. Issue: Not taking advantage of bonds good for non-AMT eligible investors. All credits AAA Enhancement Opportunity: Introduce AMT GNMA backed housing bonds. These bonds are AAA 1.25% 10.00% 0.14% and GNMA rated, and work well for those investors not eligible for AMT. Credit quality is highest quality, and backed housing programs have not suffered from the sub-prim Issue: Mutual Funds charge an annual expense fee, that hurts investor’s returns. This investor was paying roughly 45 bps on 25% of his portfolio for mutual fund services. Fees to hold 0.45% 26.05% 0.14% portfolio avoided Enhancement opportunity: Replace mutual funds with direct owned bonds. Mainline believes an investor should only pay to buy bonds, and not hold them. 30 bps = $30,000 51.7% TOTAL FOR ALL ENHANCEMENTS ANNUALLY MainLine West specialists in municipal bond investments
  6. 6. municipal bond borrowers * State Governments/Agencies * Local Governments Highest Credit Quality & The MainLine West General Financial Flexibility focus is on high quality Obligation Counties Cities Schools Bonds * credits from state and Public Enterprise local government GO credits, and high Airports GNMA/GSE Electric quality, essential service Mass Water & Utilities Transit Sewer revenue bonds issued by the public sector, Not-For-Profit Corps Revenue including unique Bonds opportunities in GNMA Universities Hospitals /GSE bonds. For-Profit Corps Less Credit Quality Airlines Solid Waste Developers *MainLine focus MainLine West specialists in municipal bond investments
  7. 7. bond offering examples tax equivalent yield examples Massachusetts Water Pollution $408,665,000.00 Federal Taxable MA Taxable Equivalent Equivalent Ratings Maturity Amount (mm) Coupon Yield Yields* Yields* Moody's: Aaae 5 years 7,140 5.000 2.460% 3.78% 4.12% S&P: AAAe 10 years 11,515 5.000 3.470% 5.34% 5.87% Fitch: AAAe 15 years 17,630 5.000 4.330% 6.66% 7.25% Typical GNMA Housing Authority Example Maturity Taxable Equiv Maturity Amount (mm) Avg Life Yield to AVL Yield to AVL 5 years 1,000,000 5.0 yrs 5.0% 4/1/2014 7.77% MainLine West specialists in municipal bond investments
  8. 8. client-focused communication keeping our clients informed Muni AlertsSM provide an overview and detailed yield and credit quality information for municipal bond credits recommended by the MainLine investment team for inclusion in a client portfolio. The MainLiner Blog The MainLine West team works in the municipal bond market all day, every day. We understand it, and we are experts. Activity in U.S. and world markets affect municipal bonds, and we are busy interpreting and adjusting our strategies and Advisory NotesSM are a series of recommendations for our free client documents providing clients. We share our thoughts important information to clients and commentary throughout regarding investment strategies the day on our blog. Join us and tax considerations. and share your comments on our thoughts and opinions. MainLine West specialists in municipal bond investments
  9. 9. complimentary portfolio review understanding our client’s needs Our complimentary portfolio review provides a comprehensive analysis of current holdings: • Cost for executing trades • Diversification elements • Credit quality • Tax efficiency • Investment strategy • The MainLine Advantage: Take advantage of our expert advice and recommendations to optimize value, tax advantage, and minimize risk exposure. MainLine West specialists in municipal bond investments
  10. 10. personalized pro forma helping optimize the client’s portfolio This is a personalized proposal based on our expertise and your specific investment objectives and specifications: • Investment horizon • Tax status • Risk tolerance • Liquidity preferences • The MainLine Advantage: Take advantage of our expert recommendations using investment themes that are aligned with your needs and constraints. MainLine West specialists in municipal bond investments
  11. 11. tax advantaged opportunity fund introduction to mainline fund investments An alternative investment opportunity providing high tax-exempt income. A consolidated vehicle to take advantage of: • Current relative value of municipal bonds • Structural imbalances in the municipal market Efficient use of low leverage = 8 – 10% federal tax-exempt income* Unique private equity capital structure • Illiquid long term commitment • 30% reserve deleveraging capital *Investment of capital in our Tax-Advantaged Opportunity Fund includes risk. When evaluating the fund as a part of your investment strategy, you should understand the potential risks that could lead to a loss of some, or all, of your capital investment. There is no assurance that the fund will achieve its objective. Past performance does not guarantee future results. A prudent investor always considers the potential risks as well as the rewards before proceeding. There are interest and management fees associated with participation in the fund which will be fully disclosed to you prior to your commitment. MainLine West specialists in municipal bond investments
  12. 12. what mainline can do for you your partner for the journey A broker/dealer focusing on institutional An alternative investment opportunity level service for our clients: providing high tax-exempt income. • Top selection of bonds • The best price • Higher income per $ invested let the mainline advantage enhance your investment portfolio: Prudent monitoring and proactive response in today’s volatile marketplace A team of professionals with over 70 years of combined experience Focus on the long-term, not reacting to short-term market uncertainty Clear, concise, client-focused thinking MainLine West specialists in municipal bond investments
  13. 13. the mainline west team years municipal bond investment experience 70 Brad kreidle, founder and president •20 years as municipal professional, including head trader at George K. Baum •Leader in establishing municipal arbitrage strategies •Leading market maker in tax exempt GNMA municipal bonds •Instrumental in developing and maintaining the leading database for prepayment analysis Mike maciolek, cfa, senior vice president •16 years experience as municipal professional, including First Data Corporation • Managed $12 billion muni bonds, $7 billion fixed income swaps; orderly liquidation •Analyst at Oppenheimer Funds; assisted in portfolio management of $2 billion tax-exempt money market funds MainLine West specialists in municipal bond investments
  14. 14. the mainline west team years municipal bond investment experience 70 Roger dalen, senior vice president • Over 30 years experience in investment banking • Specialist in quantitative municipal finance • Vice President and Trustee at Capmark Finance; responsibilities included hedging $1.5 billion portfolio of non-rated multi-family housing revenue bonds • 13 years as CFO of Kirchner, Moore & Company Dennis kortman, cpa, cfo, senior vice president • 30 years partner at national CPA firms; in charge of investment banking and accounting auditing practice • Served on AICPA’s subcommittee on Stockbrokerage Accounting and Auditing • Managing Director and CFO of investment banking firm Hanifen, Imhoff, Inc. • Consultant to brokerage clients regarding FINRA and SEC rules and reporting compliance MainLine West specialists in municipal bond investments
  15. 15. MainLine West street . suite 1500 700 17th denver . colorado . 80202 the journey is the destination