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Bond Market Predicts Low Inflation

July 11, 2017
Wall Street Journal

Investors aren’t giving up on the best-performing Treasurys, a sign some believe the recent selloff could be short-lived. With falling bond prices, the yield on the benchmark 10-year note hit its highest since early May after reaching its year low on June 26th. Andrew Pace of Performance Trust commented on the current sentiment toward the market trends given the challenges Congress has faced to pass legislation.

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Chicago Board of Education pays a steep penalty to price bonds

July 10, 2017
Bond Buyer

The Chicago Public Schools (CPS) doubled the size of its planned $250 million unrated general obligation bond deal Monday. With high yield buyers attracted by the rates and added security feature of the bonds, the school board authorized up to $500 million. Brian Battle commented on the news and the effects of the Illinois budget deal.

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Benchmark Yields Back in Charted Territory a Year After Record Low

July 7, 2017
Wall Street Journal

A year ago Saturday, the benchmark 10-year Treasury note yield hit a record low, settling at 1.366% on July 8, 2016. While many at that time expected yields would continue to fall, yields have contradicted those expectations by bouncing back one year later. Andrew Pace of Performance Trust commented on the trend and the variables at play during the remainder of the year.

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Global Bonds Sell Off, Deepening Losses -- Update

July 6, 2017
Fox Business

Investors around the world reacted to news from the Eurozone, spurring a bond sell-off and anxiety toward central bank policy. U.S. Treasury bond yields closed at their highest levels since May 11. Andrew Pace of Performance Trust commented on the change in tune from the ECB and the visible trends from traders.

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Illinois spreads narrow as market awaits House veto override

July 6, 2017
Bond Buyer

Illinois lawmakers were rewarded on Wednesday as they took a step closer to finalizing a budget package. With the potential for a downgrade looming, Illinois government passed one hurdle, leading to spreads for Illinois obligations to tighten. Brian Battle of Performance Trust commented on the speculation in the market as lawmakers continue to meet.

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Weak Inflation Continues to Hold Down Bond Yields

July 2, 2017
Wall Street Journal

U.S. Government bond yields fell in the first half of the year and startled investors along the way. Brian Battle commented on current market sentiment and what might be necessary to shift the momentum of the market.

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It’s Not Just Stocks. Bonds Are Super Calm

June 27, 2017
Wall Street Journal

Stocks and bonds have recently been quiet. However, the expectations for volatility are increasing, as seen from today’s Bank of America Merrill Lynch MOVE Index number–the lowest reading since its record lows set in 2013. Andrew Pace comments on the potential pitfalls investors might face if they take excessive risks now.

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$70,000 a day in interest — the cost of another short-term CPS budget solution

June 27, 2017
Chicago Tribune

Under the terms of a new deal with JPMorgan, Chicago Public Schools will pay approximately $70,000 a day in interest on two new expensive loans they received on Monday. Brian Battle of performance Trust commented on the deal and the reasoning of the high interest rate for the loans.

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U.S. Government Bonds Strengthen on Drop in Durable Goods Orders

June 26, 2017
Wall Street Journal

Signs of tepid U.S. business spending added to concerns and led to long-term U.S. government bond yields closing at 2017 lows on Monday. Andrew Pace of Performance Trust commented on the concerns, investor complacency, and investor risk in the market.

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Illinois could be 1st state with ‘junk’ credit due to budget

June 24, 2017
Associated Press

Lawmakers met Saturday for a special legislative session as Illinois is on track to become the first state to have its credit ranking downgraded to junk status. Brian Battle commented on the alarming nature of the news, the discussions, and the potential costs for Illinois residents.

This article was also posted to Fox News, New York Times, ABC News, Japan Times, and CNBC.

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Chicago Public Schools pay high price for needed cash

June 20, 2017
Bond Buyer

In order to close its private placement of short-term state grant anticipation notes, Chicago Public Schools paid a punishing yield. Monday’s transaction will allow the district to meet its teachers’ pension payment obligations for the month of June. Brian Battle of Performance Trust shared his insight into the lending rate of the deal, and the factors that led to this deal.

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Rauner, schools play blame game as CPS takes out costly $275M loan

June 20, 2017
Chicago Tribune

On Monday, Chicago Public Schools (CPS) closed an expensive deal to borrow cash which is needed to scrape through June and to pay out teacher pensions. Officials purchased $275 million in “grant anticipation notes,” a short-term loan, from JPMorgan. Brian Battle commented on the news and the relationship between CPS and JPMorgan.

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Spreads widen as market digests Illinois downgrades

June 2, 2017
Bond Buyer

Investors reacted as Illinois spreads widened after Thursday’s two downgrades. Investor confidence is waning as the state now has two ratings at the lowest investment grade level. Brian Battle commented on the news of the lowest rated bonds in the 44-year history of bond ratings for Illinois.

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Illinois budget inaction triggers new downgrades

June 1, 2017
Bond Buyer

Illinois is close to becoming the first state with a junk bond rating after two downgrades on Thursday. Illinois continues to reach historic lows in agency ratings for states as political turmoil continues at the state capital. Brian Battle comments on the downgrade and the signal being sent to Illinois’s government.

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U.S. Government Bonds Strengthen

May 30, 2017
Wall Street Journal

U.S. Government bonds strengthened after the holiday weekend and latest inflation report. With the recent report, investors expect the Fed will be slow in raising interest rates. Andrew Pace comments on inflation numbers, investor sentiment in the market, and the current behavior of yields.

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U.S. Government Bonds Pull Back

May 18, 2017
Wall Street Journal

U.S. government bonds pulled back on Thursday after the biggest rally of the year the previous day. Upbeat labor market and manufacturing data deflated concerns of the growth outlook, offsetting political uncertainty. Andrew Pace of Performance Trust commented on the market trends through this political climate and investors’ expectations compared to the reality.

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Bondholder’s Lament: You Used to Call Me (But No Longer)

May 12, 2017
Wall Street Journal

As rates have quickly risen in the market, fewer debt borrowers have taken advantage of the “call” provisions in some debt. Andrew Pace commented on the trend as the government called just $6.8 billion in debt in the first quarter of 2017, marking the lowest number since the April-to-June period of 2006.

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Puerto Rico's filing fuels speculation about Illinois

May 9, 2017
Bond Buyer

As Puerto Rico filed its Title III petition for bankruptcy relief, talk turned to Illinois and its likelihood of seeking a court-supervised forum. Illinois continues to grow its mounting debt as the state nears its’ second year without a budget. Brian Battle commented on the current affairs in the state and the likelihood of Illinois following Puerto Rico.

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U.S. April job gains rebound, unemployment drops to 4.4 percent

May 5, 2017
Reuters

The U.S. job growth rebounded in April and the unemployment percentage dropped to mark a near 10-year low. Brian Battle commented on the news and the overall expectations, as well as the outlook going forward.

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U.S. Government Bonds Strengthen Ahead of France Vote

April 21, 2017
Wall Street Journal

U.S Government bond prices gained ground ahead of the presidential election in France. Andrew Pace of Performance Trust shared his thoughts with the Wall Street Journal, commenting on the market’s anticipation ahead of the election, and the trends Performance Trust is seeing in bond prices and yields.

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Wall Street rally fizzles after Fed minutes

April 5, 2017
CNBC

U.S Stocks take a dramatic turn on Wednesday as meeting minutes from the Federal Reserve reveal a possible change in investment policy later in the year. The news reversed a strong rally that took place after a strong jobs report earlier in the day. Performance Trust’s Director of Trading, Brian Battle, comments on the news and cause of the market selloff.

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Why the Refinancing Slowdown Matters for the Fed

April 5, 2017
Wall Street Journal

The Federal Reserve has been purchasing fewer mortgage bonds in the last few months, which might shape Fed officials’ thinking as they consider shrinking their giant bond portfolio. Performance Trust’s Andrew Pace comments on this news and trends.

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Instant View: Republicans pull Obamacare repeal bill

March 24, 2017
Reuters

House Republicans pulled the American Health Care Act bill, their new healthcare-overhaul legislation, on Friday due to a shortage of votes within Congress. Brian Battle of Performance Trust comments on the news and the meaning of this move.

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GLOBAL-MARKETS-Stocks, dollar up on U.S. rate hike bets, Trump relief

March 1, 2017
CNBC

Treasury yields rise and Wall Street rallies, lifting the Dow above 21,000 for the first time ever as investors expect an interest rate hike in the future. Brian Battle of Performance Trust comments on the rally and the overall market sentiment that is leading the market in the current direction.

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One Group May Help the Fed Tighten Policy: Homeowners

February 21, 2017
Wall Street Journal

Federal Reserve officials are trying to determine how to unwind trillions of dollars on their balance sheet. As the Fed looks for answers, homeowners may be the group currently holding them. Performance Trust’s Andrew Pace shares his insight and analysis of this matter, and comments on the current market outlook.

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US STOCKS-Dow hits 20,000 as post-election rally roars back to life

January 25, 2017
Reuters

The Dow Jones Industrial Average reached a new all-time high, trading above 20,000 for the first time on Wednesday, resuming a rally that began after the election of Donald Trump. The rally continued after Trump signed a number of executive orders the day before. Brian Battle of Performance Trust comments on Trump’s actions and the overall reaction of the market, as well as what action we may see in the upcoming weeks.

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Chicago Yield Penalties Steepen

Januray 19, 2017
Bond Buyer

Chicago reaches a new peak in spread penalties in the primary market when it priced a general obligation sale this Thursday. Brian Battle of Performance Trust shares his insight on this news and what it may mean.

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ReadyCap Commercial, LLC Securitizes $189 Million of Real Estate Loans for Third Securitization Rated by Moody's & Kroll

January 13, 2017
MarketWatch

ReadyCap Commercial, LLC has securitized $189 million of newly originated first-lien, conventional commercial real estate mortgage loans. Performance Trust Capital Partners, LLC served as a placement agent in the deal.

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US STOCKS-Nasdaq drops with pharma stocks as Trump blasts drug prices

January 11, 2017
Reuters

NASDAQ loses ground on Wednesday as investors flee drug stocks after President-elect Donald Trump blasts high drug prices. Brian Battle of Performance Trust comments on Trump’s comments and the volatile shifts in the markets that we might see during a Trump presidency.

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Chicago Readies Billion Dollar GO Deal

January 10, 2017
Bond Buyer

Chicago is promoting its budget and pension fund gains ahead of a $1.6 billion general obligation sale. This comes as the city’s fiscal pressures loom and the state struggles with overall dysfunction. Brian Battle of Performance Trust comments on the news as well as the City and State’s positions at this time.

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Why This Treasury Market Rout Is So Painful

December 21, 2016
Wall Street Journal

There is a rout in the bond market due to the rise in yield on the 10-year Treasury note, which has caused prices to drop. Performance Trust’s Andrew Pace comments on the rise and how duration is causing the rout to be more painful for investors than it would have been 30 years ago.

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New Chicago Schools Credit Draws Strong Demand

December 19, 2016
Bond Buyer

Investors purchase Chicago Public Schools’ A rated capital improvement tax bonds. The reaction drove the group to release a greater size than anticipated, showing the strong demand and positive sentiment to the initial release and ratings. Brian Battle comments on the market reaction to the bond sale, sharing his insight on the deal and overall reaction with Bond Buyer.

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CPS borrows $729M for capital projects; $215M pension fix expires

December 15, 2016
Chicago Sun-Times

Chicago Public Schools was able to sell $729 million in bonds, which will be used to fund capital spending (i.e., overcrowding relief, school modernization, and critical repairs). However, this does not solve the issue of the $215 million that the district still needs to come up with for pension costs. Performance Trust muni strategist Brian Battle comments on the recent sale and why it does not solve the district’s long-term problems.

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Chicago School Deal's Single-A Rating Buoys Market Access

December 9, 2016
Bond Buyer

Chicago Public Schools is preparing to release an inaugural sale of bonds and has received legal opinions endorsing the deal. Brian Battle shares his insight into the new Chicago Schools bond issuance and its rating, touching on the structure of the bonds and how they received an A rating. Brian mentions the ratings and how they benefit in terms of the market access that is received.

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Wall Street, bond prices jump as markets await ECB meeting

December 7, 2016
Reuters

US stocks jump and bond prices climb as investors prepare for European Central Bank (ECB) announcement. Market reaction is a sign of preparation for the unknown. Industry specialists comment on the possible outcomes from the ECB announcement. Brian Battle of Performance Trust comments on the impending announcement and the bond market trends and potential reaction.

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Dow, S&P Hit Highs; Trump Comment Hammers Drug Stocks

December 7, 2016
Fox Business

Wall Street surges, continuing its rally since the U.S. Presidential Election. Industry leaders comment on the growth and the current trends, including the rally in bond prices. Brian Battle of Performance Trust comments on the current rally and what it means for other areas of the market.

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US STOCKS-Dow, S&P 500 surge to highs; transports set record

December 7, 2016
Reuters

Brian Battle shares his insight into current market trends. Wednesday saw a significant surge with the Dow hitting record intraday highs as the market continues its gains since the presidential election. Brian touches on the bond market rally, which has seen some significant movement over the past few weeks. Within the bond market, the greatest change has been seen in the long end of the market as investors are focusing on high-dividend stocks.

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Yield Curve at End-of-2015 Levels in Reset

November 18, 2016
Wall Street Journal

All eyes have been on the yield curve lately, and it just reached its highest level since one year ago. Performance Trust’s Andrew Pace comments on this latest move in The Wall Street Journal and explains why investors shouldn’t be too certain about where rates will go.

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O'Hare and Illinois Spreads Diverge

November 4, 2016
Bond Buyer

Thursday's pricings of an Illinois general obligation sale and a Chicago airport revenue bond deal highlighted the market's divergent sentiments about the deals' security features. Illinois saw spreads on the 10-year of its competitively issued $480 million new-money deal land at a 200 basis point spread to the Municipal Market Data's benchmark. That's up from 193 basis points on its October GO pricing and 185 basis points in June. Overall spreads fared slightly better on the short end compared to the negotiated October pricing but were on par on the longer end."This is how the market feels about these individual credits and I think it's about the trajectory of each name," said Brian Battle, director of trading at Performance Trust Capital Partners.

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Illinois Spreads Widen

October 13, 2016
Bond Buyer

Illinois' yield penalties widened Thursday as the nation's lowest-rated state sold $1.3 billion of general obligation refunding bonds against a tide of negative fiscal and market headwinds.The state's negative fiscal headlines of late combined with the deal's size, limited maturities that extended out only to 2032, and a weaker market with lots of supply drove the uptick in spreads compared to trading levels over the last month, said Brian Battle, director of trading at Performance Trust Capital Partners."There were a lot of bonds in a small number of maturities," which narrowed the investor base as some funds otherwise interested in the state's paper looked for higher-yielding maturities on the long end, Battle said, adding that it's hard to know how much any one factor drove the upswing in spreads. "I think it's everything together."

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Bond Volatility: Do the Math

September 29, 2016
Financial Advisor

The 10-year Treasury note yields have dropped by nearly 30% since the beginning of 2016, yet many on Wall Street keep predicting a looming rate hike. Jason Stuck, Director of Analytics at Performance Trust, weighs in on the subject stating, “With everyone trying to predict how soon the Fed might raise rates, we’re telling advisors that doing some basic math can reduce a lot of the guesswork involved in reassessing clients’ bond holdings.” Stuck illustrates various rate scenarios before concluding with the statement, “It’s not exactly rocket science, but the idea we’re trying to get across to advisors is that bonds lend themselves to being mathematically analyzed in a way that you can’t do with stocks.”

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Factbox: Market participants react to U.S. presidential debate

September 26, 2016
Reuters

Democrat Hillary Clinton and Republican Donald Trump traded barbs and accusations Monday night in the first debate between the two ahead of the Nov. 8 U.S. presidential election. Brian Battle, director of trading at Performance Trust Capital Partners in Chicago weighs in on the subject stating, "Debate really was not outside expectations. Trump was Trump and Clinton kept calm and seemed bemused. It was underwhelming on policy and there were no gaffes or revelations. It was a personality debate, not a policy discussion."

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Chicago Budget Will Boost Police Spending

September 22, 2016
Bond Buyer

Chicago plans to bolster its police ranks as part of a broader plan to tackle a skyrocketing homicide rate that some believe threatens to undercut the city's recent fiscal progress. Spiking crime and the national headlines it spurs have a "corrosive" effect on the city's overall image and when that happens "people leave," warned Brian Battle, director of trading at Performance Trust Capital Partners. The city has to show that it is doing what's needed to protect the "the health, safety, and welfare" of residents, Battle said. "I think the mayor is being shrewd" in his fresh announcements.

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The 3rd largest school district in the nation laid off more than 1,000 employees, and students are now calling it 'racist'

August 17, 2016
Business Insider

Chicago Public Schools (CPS) laid off more than 1,000 employees in August. The firings were over budgetary concerns and impacted 508 teachers and 521 support staff. Brian Battle of Performance Trust comments on the move by CPS.

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Despite CEO's optimism, experts say CPS operating in ‘crisis mode'

August 17, 2016
Chicago Tribune

Chicago Public Schools CEO Forest Claypool expressed optimisim last week by introducing a 5.4 billion dollar operating budget that will align forecasted expensditures with anticipated revenue. Public hearings on the prospal go underway this week before the August 24th school board vote. However, it is still clear that the system's finances are in trouble. Brian Battle, a director at the Performance Trust financial firm who has studied CPS finances states, "They're operating in crisis mode. They're managing the CPS budget month to month, quarter to quarter, in six-month increments. Where's the five-year plan? I have no doubt they can make it through, engineer their way through the next five years, but that's still not a five-year financial plan."

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Bond Investors Fear These Words: Call Me Maybe?

August 1, 2016
Wall Street Journal

Some callable bonds include provisions that let issuers "call" them before maturity, which has been happening more often recently. Performance Trust's Andrew Pace comments on this trend and calculates the impact for investors.

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Chicago's bid for 2016 Olympics leaves pricey legacy 7 years later

July 15, 2016
Chicago Tribune

The Chicago Tribune reviews the possibilities if the City of Chicago was to host the 2016 Summer Olympics, as they had hoped. The article reviews some of the “what-ifs” regarding an Olympic Village and temporary structures within the city. Brian Battle of Performance Trust comments on the method in which the city is paying off some of its Olympics-related loans today.

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Mounting Debt Weighs Down Chicago Balance Sheet

July 12, 2016
Bond Buyer

The long-term principal and interest payment schedule for Chicago's general obligation debt swelled by about $1.7 billion last year as Mayor Rahm Emanuel and his finance team scrambled to fix a downgrade-driven liquidity quagmire that threatened the city's balance sheet. "The good news is we're taking action, that's a positive and a change in Chicago," said Brian Battle, director of trading at Performance Trust Capital Partners. The bad news, he said, is that the city is captive to the state's budget struggles and political gridlock. The city needs state approval for further pension funding changes and could lose out on its share of income tax revenue and other funds as part of a state budget solution, he added.

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Economic growth worries, oil slump drag Wall St. lower

July 5, 2016
Reuters

Stocks fell on Wall Street Tuesday following their best weekly performance of the year as investors faced continued uncertainty in the wake of Britain's decision to leave the European Union and as tumbling oil prices weighed on energy shares."Brexit is a friction on economic activity and that's bad for banks," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago."Low interest rates are horrible for financials, specifically for banks. The spread between where they borrow and where they lend is getting closer together."

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Illinois Reaps Benefit of Market Timing

June 16, 2016
Bond Buyer

Illinois paid a steeper penalty to borrow Thursday after a fresh round of downgrades but a municipal market offering historically low yields helped disguise the spreads. "People showed up to buy," and the bonds sold at relatively expected levels, said Brian Battle, director of trading at Performance Trust Capital Partners. "That is a good sign in the confidence investors have in Illinois' ability to pay."

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