Private University Bonds

Discussion in 'Fixed Income' started by BMK, Aug 4, 2023.

  1. BMK

    BMK

    Like this one from Case Western Reserve University

    Matures on June 1, 2122

    That's not a typo

    Not much volume right now...

    CWRU_Bond.png
     
  2. mervyn

    mervyn

    very good school.

    you know these are corporate bonds, right? harvard reglarly issues 30 years. mit has 100 years bond, 575718AF8, 500m, due 2116, they are not liquid.
     
    murray t turtle likes this.
  3. BMK

    BMK

    Yeah, but liquidity is not that important if you are planning to hold the bonds until maturity o_O
     
    murray t turtle likes this.
  4. mervyn

    mervyn

    no, because their esteemed alum in finance sector MUST buy them.
     
  5. mervyn

    mervyn

    And don’t rush into education sector bonds, it’s a wash.

    https://www.bloomberg.com/news/arti...eals-depth-of-higher-ed-distress?srnd=premium

    Like scores of smaller, less-prestigious schools before it, plummeting enrollment pushed Cazenovia to the point where it couldn’t pay back the $25 million it owes creditors. Now, as the 200-year-old institution in rural upstate New York embarks on the tough task of winding down and liquidating, Cazenovia serves as a useful reminder of the challenges that other troubled colleges could face in the ever-widening shakeout of higher-ed in America — and for Wall Street as investors pick apart the school’s assets.
     
  6. Is there a tax benefits for these bonds?
     
  7. mervyn

    mervyn

    generally no, at best it is exempt from state tax but doubtful.
     
    TrailerParkTed likes this.
  8. I had a email invite from a US Southern Bank offering 5.6% on a one year cd. Maybe the term is too long? 6 months for 5.45 is good.
     
    murray t turtle likes this.
  9. mervyn

    mervyn

    i benchmark every fixed income trade with comparable t, rarely in the cds, bought 1-m cd twice this year, in jan and apr, slightly above the t because the svb funding scare. 6 months is too long for me, holding cash to buy major dips in the index.

    alternative you can play around zt and zn, 125 buck in less than 30 minutes hold, margin 1.6k, that is 7% total return.
     
    TrailerParkTed likes this.
  10. Case Western Reserve University has an unusual deadline, I agree. This may indicate long-term planning for the university. This is an example for others.
     
    Last edited: Jun 25, 2024
    #10     Jun 25, 2024