Correspondent Blog

Of all the lending programs in banking history, the Paycheck Protection Program (PPP) has to be one of the most complicated ever to enthrall bankers. Consider that in the next couple of weeks, banks will be:  originating the second draw of PPP (PPP2) under new guidelines; originating PPP loans under the initial set of guidelines…

A credit tenant loan (CTL) is a loan secured by the real estate pledged as collateral and the obligation of a credit-rated tenant of that real estate.  These loans are a cross between a bond (because the tenant’s obligation to pay rent is a senior obligation of a creditworthy obligor) and a commercial mortgage (because…

We’re closing in on Christmas but with a half-day tomorrow and trading desks already thinning out, today is really the last consequential trading day of the week. Also, because of the approaching holiday, we get a ton of economic reports dumped on us today from jobless claims, to personal income and spending (more on that…

Stimulus 2.0 Passes While Virus Mutates This holiday-shortened week opens with Congress finally reaching an agreement on a second stimulus bill and it should be voted on today with the president signing it into law soon thereafter.  The latest sticking point over ongoing funding for the Fed’s emergency lending programs was ironed out over the…

With the Fed meeting behind us, and not much movement off of it, the market turns its complete attention to negotiations over a Stimulus 2.0 Bill. Senate Majority Leader Mitch McConnell said late yesterday a deal is close at hand, but several sticking points remain, as they always do in these things. The nearly $900…

The Fed’s last meeting of 2020 concludes today, and while there will be no rate change there is still plenty that the Fed watchers and investors will be mulling over in the statement, press conference, and updated economic and rate forecasts. We discuss more of what we expect from the Fed in the next section….

The new split bipartisan Covid Relief Bill got traction yesterday and stands a good chance of getting approved in the next couple of weeks. Most versions of a new stimulus package contain the approval for the next draw of the Paycheck Protection Program (PPP). The SBA, in turn, is preparing to bring the program live…

With FDA approval and the first shipments of the COVID-19 vaccine start to hit our communities this week, the question comes up over should banks have a policy around if the vaccine should be mandated, recommended, supported, and acknowledged in the workplace?  On the one hand, taking a proactive stance supporting workplace vaccination could be…

We recently spoke to a frustrated banker who was amazed that a regional bank was trying to poach his existing customer by quoting the borrower a credit spread of 1.65%. At such a thin credit spread, how would any bank make a profit, and why was this regional bank so irrational?  In this blog, we…

Stimulus 2.0 and Fed Meeting Highlight the Week If there’s going to be a Stimulus 2.0 before year-end it has to come together this week unless members of Congress want to hang around Capitol Hill for Christmas. Senate Majority Leader McConnell stated late last week that there is no way forward in the negotiations but…

Negotiations over a Stimulus 2.0 Bill have stalled again and that has the risk-off trade gaining this morning and Treasuries rallying. Senate Majority Leader McConnell said late yesterday he didn’t see a path forward to an agreement and that sent stocks sliding. There are three separate packages being floated but all sit around $900 billion…

Treasuries have entered a listless trading period and that’s likely to continue until we get some resolution over: Stimulus 2.0, Senate majority, and clarity on vaccine take-up and virus case counts. Save for the stimulus bill possibly, none of these issues will be resolved this week, or this month frankly. So expect the listless trading…