Chapter’s January Dinner Meeting Featured Municipal Bond Market Outlook
Interest Rate Derivatives Topic at Afternoon Mini-Session
The Chapter’s January Dinner Meeting featured a very informative and contemporary dinner program entitled Municipal Bond Market Outlook: 2016, Focus on State and Local Government Credit Quality. The program was presented by Tom Kozlik, Municipal Strategist from PNC Capital Markets. The event was held at the Stony Hill Inn in Hackensack, N.J. on Wednesday, January 20, 2016. Members and guests enjoyed a full course dinner featuring entrees of perfectly seasoned sirloin steak or grilled salmon with baked potato and vegetable medley.

Dinner speaker Tom Kozlik was the featured speaker at the Chapter’s initial Central Jersey Breakfast Series meeting held in Freehold, NJ on January 14, 2016. Tom currently publishes municipal bond market commentary and performs evaluations of the strengths and weaknesses of municipal bond market credit profiles and related investment portfolios.

Featured dinner speaker Tom Kozlik, PNC Capital Markets, presents a Municipal Bond Market Outlook at the January Dinner Meeting.
Chapter Members learn perspectives on the municipal bond market during the dinner presentation.
Tom Kozlik provides an expert outlook on the municipal bond market for 2016 to the membership during the dinner presentation.
Tom discussed the current economic trends and summarized the key factors affecting the municipal bond market. He expects that 2016 municipal credit volume will decrease marginally compared with 2015 volumes from $398 billion to a range of $325 - $375 billion. Tom believes that overall municipal bond credit conditions are expected to remain favorable during 2016 with no immediate credit crisis looming over the municipal market. Tom emphasized that local government issuers are facing credit quality downgrades at an above-average rate due primarily to continued declines in tax revenues. Tom cautioned investors to monitor the credit profiles of bond issuers for signs of structural imbalance.

Tom answered a series of provocative questions from the financial managers in attendance following his expert analysis and commentary.

The Basics of Interest Rate Derivatives for Community Banks was the topic of the afternoon mini-session presented by Sara Higgins, Managing Director from Sandler O’Neill + Partners, LP. Sara presented the “mechanics” of interest rate swaps and demonstrated practical applications of hedging customer loans and hedging wholesale liabilities. She provided the basis for calculating a swap rate and demonstrated the “logistics” of the interest rate swap process. Sara explained that community banks of all sizes are effectively using interest rate derivatives to hedge exposure to interest rate sensitivity. Sara emphasized that interest rate derivatives can represent an effective method of hedging balance sheet exposure, but cautioned that such activity should only be undertaken when the board and senior management of an institution fully understand the potential risks.

Members and guests also enjoyed a splendid cocktail hour which offered everyone in attendance the opportunity to mingle and relax while enjoying a lavish array of fine appetizers served by the expert staff at the Stony Hill Inn.

Topics and Speakers

Municipal Bond Market Outlook: 2016

Thomas Kozlik photo
Tom Kozlik
Municipal Strategist
PNC Capital Markets
215 585-1083

Slide Presentation
Municipal Market Outlook 2016

The Basics of Interst Rate Derivatives for Community Banks

Sara Higgins Photo
Sara Higgins
Managing Director
Sandler O'Neill + Partners LP
212 466-+7811

Past Chapter President Cindi Rand performs the traditional invocation prior to the dinner presentation.
The Basics of Interest Rate Deriviatives was presented by Sara Higgins, Sandler O'Neill + Partners, at the afternoon mini-session.
Members earn valuable CPE credits while attending the free mini-session.