HJ Sims Expands Investment Banking Team to West Coast, Midwest; Grows Private Client Team in Florida, Puerto Rico

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CONTACT: Tara Perkins, AVP Marketing Communications | 203-418-9049 | [email protected]  

HJ Sims Expands Investment Banking Team to West Coast and Midwest; Grows Private Client Team in Florida and Puerto Rico 

FAIRFIELD, CT HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935is pleased to announce the addition of two senior bankers as the firm expands with the opening of new offices in the Midwest and on the west coast. 

Lynn Daly joins Sims as Executive Vice President in its new Chicago location with 30+ years of experience working with nonprofit organizations in financing. Daly was acting head of Senior Living Investment Banking at BB&T Capital Markets, where she managed BB&T’s senior living relationships in the Midwest, facilitating financings of $1.3+ billion. Prior to BB&T Capital Markets, Daly spearheaded the Catholic Initiative within senior living investment banking for Ziegler, and served as Head of Allied Irish Bank’s Midwest region. Daly earned a BS in economics from Kalamazoo College, and an MBA from Northwestern University’s Kellogg Graduate School of Management.  

“We are so thrilled to welcome Lynn Daly to the HJ Sims family. Lynn is a well-respected and nationally recognized thought leader in the senior living sector and the perfect leader to grow our presence in the Midwest and to work with our team as we continue to expand throughout the US. Lynn’s extensive experience as both a senior commercial and investment banker, along with her integrity, deep knowledge, and client-centered approach, are vital characteristics and values that will guide our clients and business partners through these challenging times,” said Aaron Rulnick, Managing Principal, Sims. 

Brady Johnson joins Sims as Senior Vice President in its new west coast office, in Orange County, CAPreviously with Hunt Real Estate Capital, Johnson was responsible for real estate debt originations for seniors housing and healthcare properties. He helped establish the firm’s seniors housing real estate lending platform, including a proprietary bridge loan program and expansion of the firm’s agency and HUD financing capabilities. Johnson closed the firm’s first Fannie Mae seniors housing loan, followed by its first seniors housing Freddie Mac loan. Prior to joining Hunt, Johnson served as Director of Seniors Housing & Healthcare at RED Capital Group, and served with GE Capital in various commercial finance roles. Johnson earned an MBA from Thunderbird School of Global Management and Bachelor’s degrees (Economics and Spanish) from the University of Utah.  

“We are excited to welcome Brady Johnson to the Sims family. Brady will help establish our west coast presence serving for-profit and non-profit senior living clients. Brady’s broad experience in FHA, Fannie Mae, Freddie Mac, mezzanine and senior housing financeand his focus on achieving the best solutions for his clients make him a great asset,” said Jeffrey Sands, Managing Principal, Sims. 

In late 2019, Sims expanded its Private Client team, adding aoffice in Jupiter, FLhousing a three-person advisory team, as well as a senior partner of Sims Energy. HJ Sims’ Puerto Rico private client office moved its Guaynabo headquarters to a larger space iMetro Office Park. The spacious quarters enable the team to better host clients, while the expansion reinforces Sims’ established presence and growth on the island. 

HJ SIMS: Founded in 1935HJ Sims is a privately held investment bank and wealth management firm, headquartered in Fairfield, CT, with nationwide locations. www.hjsims.com. Investments involve risk, including loss of principal. This is not an offer to sell or buy any investment. Past performance is no guarantee of future resultsMember FINRA, SIPC. FacebookLinkedInInstagram Twitter. 

HUD Business During a Pandemic

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The COVID-19 virus is having a profound impact on the nation, temporarily, but dramatically, affecting how we live and work. The virus is roiling the capital markets, and policies imposed to slow its spread have ground the economy to a crawl in many quarters. The mortgage banking team at Sims Mortgage Funding has taken to working remotely, linked to each other, our clients and our consulting and business partners electronically, and we will continue to operate this way until the “all clear” sign is announced.

In times of crisis there also is opportunity, and the COVID-19 virus proves no exception. Interest rates for HUD-insured loans have fluctuated wildly over the past few weeks, but the gradual tightening of spreads over the yield on 10-year US Treasuries and steps by the Federal Reserve to ensure liquidity into the government-backed securities markets, improving sale conditions, have created a very favorable climate for interest rates on HUD-insured loans.

How favorable? We are seeing indications of interest around 2.60% for HUD-insured refinancing loans and about 3.30% for construction and substantial rehabilitation loans. Please note that these rates exclude HUD’s annual mortgage insurance premiums, which range from .25% to .77% depending upon such factors as the project type, loan purpose, affordability restrictions, etc. These are terrific rates, reminiscent of what we saw in the HUD-insured loan markets during the Great Recession in 2008.

HUD has taken positive steps to remain operational by working remotely during the COVID-19 crisis. They have established procedures to process mortgage insurance applications and are working with our trade associations and third-party report providers to develop protocols for site and building inspections and appraisals. HUD also has developed arrangements for closings remotely – we’ll soon see how this works as we have a multifamily affordable refinance loan in the Southwest Region just starting the closing process.

HUD’s goal is to conduct business as usual during these difficult times – however, it remains to be seen how the negative economic conditions resulting from a national shutdown of the economy and the effects of COVID-19 on the senior housing sector will impact HUD’s review of new mortgage insurance applications. We are hearing anecdotally that HUD is contemplating increased reserves and other escrows for market-rate construction loans, and potential adjustments to project valuations to account for the impact of COVID-19. More to come there.

One of the central missions of HUD’s mortgage insurance programs is to provide credit support and liquidity to the housing and healthcare/senior capital markets during times of economic difficulty. Given the magnitude of the economic dislocation in the wake of the COVID-19 virus, HUD is expected to play an integral, and necessary, component in our national recovery.

We wish you and your families the best and hope that you are staying safe.

Generations at Shalom Park

Generations at Shalom Park represents a collaboration between Shalom Park, a culturally Jewish mixed-use development in the Charlotte, North Carolina metro area, and Aldersgate Life Plan Services, Inc., a well-established Charlotte-based non-profit Methodist organization currently operating an existing life plan community and home care agency.

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An Update on COVID-19 (Coronavirus)

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As news on the coronavirus (COVID-19) continues to unfold following the declaration of a national emergency, we wanted to stay in touch regarding key details as well as how we may assist you during this unprecedented time. We also recommend following the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO) for the latest information.

In addition to previous recommendations regarding vigorous hand washing for at least 20 seconds and staying home when feeling ill, recent recommendations have centered on “social distancing” and “flattening the curve.”

Designed to slow down the spread of the virus, social distancing is a public health practice that involves staying at least six feet away from others and avoiding handshakes, hugs or other forms of physical contact. With the aim of preventing the public–-including those who are not yet showing symptoms-–from spreading COVID-19 or other illnesses, it also entails cancellations and closures, as evidenced by the number of school closures and event cancellations. As of March 15, the CDC recommended that gatherings of 50 people or more be avoided for the next eight weeks—it is important to realize this may change by publish date of this article as this is a very fluid situation.

To that end, social distancing can help flatten the curve or reduce spikes in the number of new coronavirus cases, which can stress an already taxed healthcare system. A flattened curve can decrease the spread and lead to better health outcomes for those who do fall ill.

If you are concerned about your investments and the recent market fluctuations, please reach out to your HJ Sims financial advisor at any time. Our team recommends diversifying and investing for the long-term, and we are happy to discuss individual strategies.

Finally, while it is important to stay informed, too much news can also be overwhelming. Do your best to take breaks and take care of yourself.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

 

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

Prevention of Coronavirus

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With coronavirus or COVID-19 spreading to more cities, states and countries, awareness and concern also continue to grow. No matter where you live or what your age, it is important to take steps toward protection.

Following are several simple steps you can take to prevent illness and bolster your health:

  • Wash your hands for at least 20 seconds. Even regular hand washers often miss this mark – 20 seconds is about the time it takes to sing “happy birthday” twice. Determine a song of your choice or follow the second hand on your watch to ensure you are washing with soap and warm water for at least 20 seconds. If soap and water are not available, you can use an alcohol-based hand sanitizer that contains at least 60 percent alcohol.
  • Avoid close contact with anyone who is sick, no matter what the illness. If you are caring for someone who is sick, try to wear a mask. The CDC only recommends masks for those who are ill or caring for someone who is sick. Stay home if you feel unwell.
  • Avoid touching your face, particularly your eyes, nose and mouth. Also, avoid shaking hands for the duration of the virus.
  • Clean and disinfect surfaces regularly – this can include commonly touched areas such as doorknobs, light switches, computers, handles, phones, bathroom sinks, counters, toys and more.
  • Take care of your mental and physical health. Make sure you are eating well, drinking plenty of fluids, exercising and doing something to relieve any stress you may feel regarding the virus. Limit screen time, particularly if you find yourself getting overwhelmed by news or social media messages.

With symptoms including fever, cough, shortness of breath and body aches, coronavirus can be confused with influenza. Please contact your doctor’s office with any concerns.

To prepare your household, you can gather a two-week supply of non-perishable food staples and household supplies such as toilet paper, laundry supplies and diapers. It is also recommended to have at least a 30-day supply of prescription medications and other common health supplies (cold medicine, pain relievers) on hand. You may also want to create a plan in case of closure at work, daycare or school.

In addition, you can visit the Centers for Disease Control and Prevention (CDC) site for ongoing updates and information.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

 
The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

Gift of Life: Recap from 17th Annual Late Winter Conference

Gift of Life (GOL) joined our 17th Annual HJ Sims Late Winter Conference February 25-27 in San Diego. GOL was represented by Alicia Lorio, a leader of their Young Professionals Committee in Orange County; and GOL blood stem cell donor, Alec Nadelle.

Alicia shared GOL’s history and spoke about the importance of growing the GOL stem cell registry to give second chances to those afflicted by blood and bone cancer. Before introducing Alec, Alicia shared how individuals can get involved with GOL and increase the number of those within the registry by encouraging individuals to swab their community and swab at their workplace.

Next, Alec shared his experience with GOL. He donated blood stem cells in November 2012 to a (then 71-year-old) woman battling a fast-moving form of Leukemia. The presentation left attendees feeling truly moved.

The team was excited to share an update about the amazing CSR partnership that HJ Sims and GOL have shared during the last two years.

From running fundraising drives to sponsoring the Steps for Life events to helping underwrite equipment for a
new state-of-the-art Stem Cell Collection Center located in Boca Raton, HJ Sims continues to be honored to support GOL and their mission to cure blood cancer through marrow and stem cell donations. GOL has facilitated nearly 3,600 transplants since its inception.

For more information, visit www.giftoflife.org

How to Cultivate a Green Thumb This Spring

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Gardening and getting your hands a little dirty by digging in the soil can be an incredibly healthy hobby: Gardening can reduce depression and anxiety, help people lose weight, and increase quality of life and overall sense of community, according to Science Direct.

Not everyone, however, is a natural-born gardener – it takes time and trial and error. If your previous efforts at growing plants and flowers, or fruits and vegetables, have been less-than fruitful, there is hope.

Check out the following helpful hints for cultivating your very own green thumb:

  • Relax. Even the best gardeners in the world have made plenty of mistakes. Recognize that Mother Nature can be fickle, weather is not predictable and perfection is not really the goal. Rather, half the fun can be in the planting, watering and watching.
  • Plan. Depending on where you live, you will likely have more success with plants that grow well in that area. The National Gardening Association shares a zone map that can help you learn more about your location and what might grow well there. You can also talk to others about hardy plants that tend to thrive where you live.
  • Enlist help. Invite family or friends to contribute to your garden – kids are often more willing to eat vegetables they have grown themselves – or check out local community gardens. You can quickly double your expertise when you engage others in your planting and growing efforts.
  • Keep it simple. You can consult with a local nursery center to determine the best options for your garden. Peppers, tomatoes, basil, onions and chard as well as sunflowers and dahlias are often great starter choices. You can always expand in the future.
  • Gear up. A shovel and gardening gloves are good tools to have on hand. Garden scissors and a small trowel may also come in handy. Perhaps, some knee pads will offer comfort when you are digging in the dirt, planting seeds and tending to the garden.
  • Water and weed. You will not need to dig into the soil every day, but pay attention to how your garden is looking and growing. Ensure plants are watered regularly and that weeds are removed at least weekly. A little maintenance can go a long way towards creating an attractive and functional garden.

Finally, you can always consult with local experts at the growing number of farmer’s markets, nurseries or gardening groups. Many of these green thumbs would love the chance to share their passion with you and offer more tips on growing a gorgeous garden this year.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

 
The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

Asbury Communities

Asbury Communities Partners with HJ Sims again to Streamline its Capital Structure with its Pennsylvania and Maryland Obligated Groups

“Asbury Communities once again chose HJ Sims to represent us for a refinancing in Pennsylvania and Maryland for our callable debt. The Sims team was able offer solutions for both refinancings that exceeded our expectations. One of the refinancings was a public deal that came to the market at a difficult time. Sims presented a strategy that worked better than anticipated, and we were able to refinance our debt on superior terms. I would highly recommend working with Sims as they listened to our objectives, formulated a great plan, and executed on it. We couldn’t be happier with the results.”
– Andrew Jeanneret, Chief Financial Officer, Asbury Communities, Inc.

For more information on how Asbury’s Maryland and Pennsylvania Obligated Groups, please contact:

(301) 424-9135

Melissa Messina

(203) 418-9015

Asbury Bethany Village – Mechanicsburg, Pennsylvania
Asbury Methodist Village – Gaithersburg, Maryland

Partnered Right®

Asbury Communities, Inc. (“Asbury”), owns and operates life plan communities in Pennsylvania, Maryland, and Tennessee, as well as HUD Section 202 senior housing buildings, a foundation, and a for-profit technology consulting firm. All of the facilities that are included in its Pennsylvania and Maryland Obligated Groups are owned and operated by Asbury Atlantic, Inc. (“Atlantic”), a wholly-owned subsidiary of Asbury Communities.

Pennsylvania Obligated Group

Asbury’s Pennsylvania Obligated Group (the “Pennsylvania Obligated Group”) consists of two communities – Bethany Village Retirement Center (“Bethany Village”) located in Mechanicsburg, Cumberland County, Pennsylvania and Springhill (“Springhill”) located in Erie, Pennsylvania, both life plan communities (LPCs). Bethany Village consists of two campuses with an aggregate of 400 independent living units, 100 assisted living units and a 69-bed skilled nursing center and related amenities. Springhill has 158 independent living units, 35 personal care units and an 80-bed skilled nursing facility.

Maryland Obligated Group

Asbury’s Maryland Obligated Group (the “Maryland Obligated Group”) consists of two communities – Asbury Methodist Village (“AMV”), a LPC located in Gaithersburg, Montgomery County, Maryland, and Asbury Solomons Island (“Solomons”), a LPC located in Solomons, Calvert County, Maryland. AMV provides a continuum of living through 826 independent living apartments, courtyard homes and villas, 133 assisted living suites and 257 comprehensive care beds located in a health care unit that includes a post-acute care unit and a memory support special care unit. Solomons has 300 independent living apartments and cottages, 24 assisted living suites and a health care center containing 48 licensed skilled and intermediate nursing care beds.

Sims recently served as underwriter to Asbury in 2018 for its Maryland Obligated Group’s Series 2018 Bonds; a financing that provided $7.5 million of new money bonds for capital expenditures, while also achieving over $8.3 million in net present value savings for the Maryland Obligated Group.

Structured Right®

Pennsylvania Obligated Group

In the summer of 2019, HJ Sims was engaged again by Asbury Communities to facilitate the refinancing of the Pennsylvania Obligated Group’s outstanding Series 2010 Bonds and the Maryland Obligated Group’s outstanding Series 2009B Bonds. Asbury Communities also sought Sims’ partnership in modifying the support agreement between Asbury Communities and the Pennsylvania Obligated Group and restating their existing Master Trust Indenture to align it with the modernized terms from the Maryland Obligated Group’s Series 2018 Refunding Bonds. Sims served as Underwriter of the Series 2018 Bonds, and worked closely again with management of Asbury to facilitate their objectives of minimizing overall interest expense while attaining level debt service and maximum flexibility

Maryland Obligated Group

For the Maryland Obligated Group, Sims facilitated a request for proposals process to select a bank partner and negotiated a tax-exempt bank loan used to refinance the Series 2009B Bonds, and finance $5,000,000 in capital expenditures reimbursements made by Maryland Obligated Group in the ordinary course of business.

Executed Right®

Pennsylvania Obligated Group

In order to meet the strategic financing objectives of Asbury, Sims suggested a short-term forward commitment to reduce or eliminate the effects of negative arbitrage from a current refunding occurring within 90 days of an optional redemption date. Sims priced the Pennsylvania Obligated Group’s Series 2019 Bonds on November 7, 2019, and set closing on December 31, 2019 to eliminate negative arbitrage through the first optional redemption date of the Series 2009B bonds on January 1, 2020. By doing so, the Pennsylvania Obligated Group avoided nearly $600,000 of negative arbitrage between the pricing date and closing date, reduced the overall borrowing, and maximized savings. The structure for the Pennsylvania Obligated Group also included semi-annual sinking fund installments, call provisions that took into account the impact of the elimination of advanced refunding bonds, and restated the underlying master trust indenture documentation and support agreements.

Maryland Obligated Group

As part of the Maryland Obligated Group’s bank financing negotiations, Sims was able to procure a 4 year, fully amortizing loan matching the maturity of the Series 2009B Bonds at a swap rate of 2.226% and a 7 year, fully amortizing loan for the reimbursement of capital expenditures at a swap rate of 2.309%. This financing also effectively defeased the final series of bonds that had been issued under the Maryland Obligated Group’s original operating support agreement, opening the door for the complete elimination of the operating support agreement if the Maryland Obligated Group wanted to do so.

Financed Right®

Pennsylvania Obligated Group

For the Pennsylvania Obligated Group, the aggregate $59,480,000 Series 2019 Bonds are projected to generate nearly $850,000 of debt service savings annually through 2041 and over $1.2 million annually from 2042 to 2045 for an aggregate net present value savings of $15 million over the life of the bonds.

Maryland Obligated Group

For the Maryland Obligated Group, notwithstanding the $5 million additional funds borrowed, the financing resulted in a mere approximate $20,000 increase in maximum annual debt service and achieved Maryland Obligated Group’s goals. The implemented financing structure allows Asbury to achieve its objectives of minimizing overall interest expense while sustaining and improving debt service coverage metrics and providing maximum flexibility.

For more information on how Asbury’s Maryland and Pennsylvania Obligated Groups were Financed Right® by HJ Sims, please contact:

(301) 424-9135

Melissa Messina

(203) 418-9015

Testimonials may not be representative of the experience of other clients. Past performance is no guarantee of future results

Jewish Home Family

Jewish Home Family is a private not-for-profit corporation operating an integrated healthcare delivery system principally serving the residents of Bergen County, New Jersey. Jewish Home at Rockleigh has been operating the 180-bed Russ Berrie Home for Jewish Living since 2001 on a park-like 16 acre campus in the Rockleigh Township of Bergen County, New Jersey.

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HJ Sims 2019 Late Winter Conference Recap

Thank you!

On behalf of the entire HJ Sims Investment Banking team, we want to thank you for attending the 16th Annual HJ Sims Late Winter Conference at the Sheraton Sand Key Resort in Clearwater Beach, Florida. We at Sims are proud of our commitment to furthering conversation about financing methods & operating strategies in the Senior Living Industry. Bringing together a dynamic group of speakers from Non-Profit and Proprietary Senior Living Providers, as well as outside experts with thought-provoking views, it is our goal to have provided profound insight and an invaluable forum for exchanging ideas and information.

Post-Conference Follow-Up

Our Conference Recap provides comprehensive coverage of the many sessions and event highlights from the 2019 HJ Sims Late Winter Conference.

You can help us make the next Late Winter Conference even more successful by completing this survey. We very much appreciate your input. Thank you.

In case you missed it, below are the details from our 16th Annual HJ Sims Late Winter Conference.

Photos

We invite you to view the many beautiful photos from our conference. Peruse the galleries below and visit the HJ Sims FacebookInstagramLinkedIn or Twitter pages.

For attendees who updated their professional headshots at the “Headshot Hub,” our photographer, Thee Photo Ninja, has posted all headshots in this gallery. Login using the password, sandkey. To download your image, simply click on the photo, and click the download button at the top of the browser.

Activities Photos

We invite you to view photos from the 2019 Late Winter Conference. Then, either view the thumbnails or to view the images as larger icons, click on the image and scroll through.

Shown below are highlights from our recreational activities: Golf Tournament at Innisbrook, Chocolate Making & Tasting at William Dean Chocolates, Sailing on the Kai Lani catamaran and the Schooner Clearwater, Fishing at Hubbard’s Marina and Biking through Dunedin.

While the weather may not have cooperated, it looks like we all managed to have a fun time.

Education Photos

Networking Photos

Corporate Social Responsibility: Gift of Life

Gift of Life (GOL) representatives attended our conference as part of a special presentation at our Opening General Session, which included an introduction to HJ Sims’ Corporate Social Responsibility (CSR) program by Tara Perkins, Assistant Vice President Marketing Communications, HJ Sims, and a screening of the Gift of Life/HJ Sims partnership video. Sharon Kitroser, Corporate and Community Relations Officer, GOL, delivered a short history and shared the donor story of Ryan Corning. Ryan then took the stage to discuss his heartwarming experience—there was not a dry eye in the house! Sharon, Ryan and other GOL staff remained on-site throughout the conference —swabbing, distributing information and answering questions. It was a wonderful experience to share with our attendees.

Kitroser says, “It was truly an honor to join HJ Sims at their Conference. GOL presented our mission to save lives through marrow and stem cell donation, and shared how our partnership has come to life in the past 10 months. We introduced one of our heroic donors…Ryan Corning of Land O’Lakes, Florida who saved 47 year-old New Yorker Julio Rivera, who has survived leukemia thanks to his transplant. Attendees were excited to hear more about how their teams can swab their cheeks to save a life. Plus, more than 30 individuals joined the registry right there at the conference!”

Save the Date

Please save the date for next year, the 17th Annual Sims Late Winter Conference at the InterContinental in San Diego, California.

Thanks again!

Market Commentary: A Matter of Degrees

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The average lifespan back in 1868 was approximately 38.3 years. People were shorter and thinner and suffered all manner of chronic and infectious diseases. Dr. Carl Reinhold August Wunderlich, a German physician, psychiatrist, and medical professor was running the hospital at Leipzig University at that time. In the process of observation and diagnosis, he took the axillary temperatures of 25,000 patients using a foot long thermometer that required 20 minutes to register. Based on the curves he patiently plotted, he determined that fever was not a disease but a symptom, and that the normal human body temperature is 98.6 degrees Fahrenheit. His is the measurement that we have since used to determine the gravity of illness in everyone from newborns to centenarians. But the human body has changed over the years and researchers have been disputing the Wunderlich axiom since the early 1990’s. The latest of two dozen modern studies is from Stanford University, where researchers finds that the new normal is closer to 97.5 degrees. But, as one might imagine, revising the cherished dictums on clinical thermometry is a not a speedy process.

In Wuhan, China and in clinics, hospitals and doctor’s offices around the word, degrees matter. Temperatures of 99.1 or higher are raising alarms as possible symptoms of a coronavirus that causes a lethal form of pneumonia. Dry cough, muscle pain and fatigue may also present over the course of a week before an infected person feels ill enough to seek medical care. At this writing, there are 4,585 confirmed cases in 18 countries and the death toll has reached 106. The rapid spread of the disease has spurred herculean efforts on the part of health professionals and chilling fears among travelers and investors who recall the spread of severe acute respiratory syndrome (SARS) in 2002 and the Ebola virus in 2014.

Global financial markets, which have already withstood the shocks of U.S.-Iran hostilities, the U.S-China trade conflict, the approach of Brexit, and the impeachment trial of a U.S. president in the first three weeks of the New Year, became roiled again on Monday. Even though health officials remind us that the influenza has resulted in 12,000 to 79,000 deaths annually since 2010, reports on the spread of a mysterious virus caused a one-day selloff in stocks on exchanges in Asia, the U.S. and Europe. Bloomberg reported that the slide wiped about $1.5 trillion off the value of world stocks in one week. The Dow erased the entire month’s gains and the Russell 2000 fell 1.5%. Oil prices fell 13% to $53.14 per barrel and gold gained $57.41 an ounce. Money quickly shifted to bonds and the dollar until Tuesday, when traders viewed the degree of global containment effort as likely to prevent a major economic loss. So far in 2020, the 2-year Treasury yield at 1.44% is up 12 basis points. The 10- and 30-year yields have plunged 31 basis points to 1.60% and 2.05%, respectively. Alongside governments, 10-year Baa-rated corporate bond yields have fallen 29 basis points and both the 10- and 30-year AAA municipal bond benchmark yields are down 26 basis points to 1.18% and 1.83%.

Markets focused on the possible implications of an epidemic in China leading to a global health emergency would otherwise be obsessed with Thursday’s Gross Domestic Product number, Friday’s British farewell to the European Union, wagers expected to total $6 billion on Sunday’s Super Bowl, and Wednesday’s meeting of the Federal Open Market Committee, the first such gathering of the year. Voters this year present as a few degrees more dovish, as the Fed Presidents from Kansas City and Boston relinquish their seats to the Fed Presidents from Cleveland, Philadelphia, Dallas and Minneapolis. There are still two vacancies for the Board of Governors and the nominees await Senate confirmation. Investors will watch the press conference and take the proverbial temperature of the Chair and Committee members on inflation, repurchase agreements, and the virus. Futures trading reflects only a 12% chance of a rate hike.

The municipal market is expected to see only $5.7 billion of new issues this week and the 30-day visible supply totals a mere $10.1 billion while redemptions and maturities are expected to add $25.8 billion of cash to the yearlong manhunt for tax-exempt and taxable municipal bonds. The largest financings happen to be for hospitals in Florida and New York, and there are several other health system issues in North Carolina, Indiana and Ohio on the slate. In the high yield space, the Port of Beaumont, Texas has a $265 million non-rated issue with tax-exempt and taxable series for the Jefferson Gulf Coast Project, Howard University is bringing a $145.4 million BBB-minus rated taxable refunding with a corporate CUSIP. And the California Enterprise Development Authority has a $9.2 million Ba2 rated financing for the Academy for Academic Excellence.

From the world of academia, Dr. Matthew Lieberman will be a keynote speaker at the 17th Annual HJ Sims Late Winter Conference next month in San Diego. Professor Lieberman holds degrees from Rutgers and Harvard and directs the Social Cognitive Neuroscience Lab at UCLA, one of the first labs to combine social psychology and neuroimaging. He measures and maps brain activity to demonstrate how we are wired to have a natural preference for switching from non-social to social tasks, how putting our feelings into words can have a soothing effect on those emotions, and how we might be able to help people who disagree come together without being disagreeable. He contends that our need to connect with others is just as important, if not more, than our basic need for shelter and food. So we invite you to hear his remarks, join us at the InterContinental Hotel, savor dinner at the San Diego Zoo, and enjoy a tremendous networking opportunity by registering at this LINK.

Special Credit Considerations for Seniors

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There is a reason that seniors often have the best credit scores, according to Experian. By the time people retire or reach senior status, they have likely been focusing on credit scores and building or maintaining good credit for a significant span of time, with often-impressive results.

While some people believe that they can relax their credit concerns once they retire, that is not necessarily the case. You will still want – and need – good credit if you decide to move or make updates to your current home, enter an assisted-living facility, or apply for a new credit card that offers great rewards points and perks.

In addition, solid credit scores will enable you to qualify for the best rates when it comes to mortgages and insurance, and can help if you decide to return to the job market, since employers are increasingly checking on applicants’ credit histories before making an offer.

How to earn extra credit

First of all, make a note on your calendar to check your credit report annually to ensure that you are not a victim or fraud – credit reports can also contain costly errors. AnnualCreditReport.com offers a free report once a year. No matter your age or stage, everyone should remain vigilant, particularly in the wake of recent serious data breaches.

Even a stellar credit report can decline if payment history, the biggest portion of your credit score, suddenly dwindles. It is important to keep your credit record active by using your current credit card(s) to pay for groceries, gas, travel and entertainment. You can earn rewards points, organize your bill paying and continue to bolster your credit score by using your cards.

Finally, continue to pay your bills on time, keep credit card balances low and think twice before opening any new accounts. Good payment history, and the longevity of your accounts, should continue to keep your credit score high.

Even if you are relatively debt-free, your credit score still matters.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

Breaking Bad Online Habits

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By Megan Morrow

January is the month of New Year’s resolutions – exercise more, stop smoking, eat more vegetables, try something new – yet “break bad online habits” is probably not a top 10 resolution, even though it likely should be. As we perform more life tasks online, such as paying bills, downloading new apps, keeping in touch with old friends and sharing funny videos, we do not always pause to think of the best ways to keep our personal data secure and private.

Following are three steps you can take to break your bad online habits and set the stage for a safe and secure 2020:

  1. Avoid using the same passwords over and over again. Granted, it is easier to remember your passwords when they are all a variation of your kids’ names, your address or your birthday, for example. However, when you recycle passwords, a hacker who uncovers one password will have much easier access into the rest of your accounts. You can save your most robust, complicated passwords for financial sites.
  2. Resist the temptation to say “yes” without more careful examination. Scam emails are getting more sophisticated, so it is always wise to verify online requests for money or account access, while many apps will ask for your location or the ability to access other account features. Offer the bare minimum of information when you launch a new app or website and say “no” to most location requests (other than maps, which need to know where you are so they can get you to your next destination).
  3. Lock your devices. Many people assume work laptops are safe and that their phones are usually nearby, thus choosing not to use “lock screen” protections. It only takes a few moments for someone to install spyware or malware on your device or to see confidential information that you have left up regarding clients or your own personal information. This is a simple step that can protect you at work and at home.

Other simple changes you can make to protect yourself include: never check your bank accounts over public wi-fi, pay attention to anti-virus updates, do not click on links or download files from suspicious or strange email addresses, and always take advantage of the free annual opportunity to check your credit report.

While online banking, shopping and communication can offer ease and convenience, they can also lead to identify theft and long-term issues: If you have not already, make online security one of your New Year’s resolutions.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.

Market Commentary: On Magic Mountain and Capitol Hill

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Government, business, academic, humanitarian and other leaders and dealmakers from 117 countries gather this week at the ski resort in Davos-Klosters, Switzerland for the 50th annual invitation-only meeting of the World Economic Forum. This year’s theme is “Stakeholders for a Cohesive and Sustainable World” and the thousand-odd journalists covering the events on the “Magic Mountain” will once again be taking the proverbial temperature of the global elite on topics such as cybersecurity, climate, e-commerce, inequality, reskilling, rural mobility, and the future of healthcare. The combined wealth of attendees, on a per-square-foot basis, will likely set a new record and the menu as well as the agenda will be a topic of lively debate. Half of the 70,000 meals for participants, staff and security will feature a plant-rich flexitarian plates such as broccoli mousse with toasted pignoli, and maple-smoked haloumi cheese with mint dust.

President Trump is delivering a keynote speech to the Forum at this writing. In his scheduled meetings with the Presidents of the European Commission, Iraq, Switzerland and Kurdistan, and the Prime Minister of Pakistan, he is accompanied by his Secretaries of Treasury, State and Commerce, his U.S. Trade Representative, and Deputy Chief of Staff for Policy Coordination. While they represent the nation overseas, the U.S. Senate has convened on Capitol Hill in Washington for only the third time in history to sit as a court of impeachment. The first day of the trial began on Tuesday afternoon with votes on rules to govern the proceedings. Senators will be living on snacks in the cloakroom for several weeks of marathon proceedings while reviewing the facts and reflecting the proverbial temperature of the nation on the charges against the President. At this point, no one expects conviction and removal, but the political process is back in progress and has been known to have some twists and turns.

The Chief Justice of the Supreme Court is a thousand feet away from colleagues concurrently considering a long calendar of unrelated cases while he is required by the Constitution to preside over an entirely separate branch of government, again for only the third time in history. The rest of the country nevertheless proceeds with more routine matters. At the Federal Reserve, the Open Market Committee prepares for its first monetary policy meeting of the year. The Treasury is auctioning $78 billion of 3- and 6-month bills and $80 billion of 4- and 8-week bills and planning to re-issue 20-year bonds. The Centers for Disease Control is immersed in identifying and preventing the spread of the deadly new Wuhan coronavirus. The Census Department has kicked off the decennial population count in rural Alaska. Democratic voters in Iowa are getting ready to caucus.

On Wall Street and at Davos, investors are sitting on a lot of cash but many are very confused about when and where to put it to work. Last year, it paid to buy almost anything. This year, there are new concerns about the sustainability of the 121-month U.S. economic expansion, the 30-year bond market rally, the 11-year bull market in stocks, and geopolitical tensions that spiked at the start of the new decade. It is unclear how much help central banks can be in a future economic downturn. Trade conflicts persist, even after the Phase 1 agreement was signed with China and the Congress approved the Administration’s new trade deal with Canada and Mexico. There is still plenty of uncertainty remaining with Brexit and not much apparent reward for taking risks in nearly any global sector. Rates remain at historic lows and asset prices are elevated across the board. Cash may be “trash” in the eyes of some fund managers, but 10-year sovereign bonds yields in Germany, the Netherlands, Switzerland and Japan are still negative as are many returns after adjusting for inflation.

At the midway mark in this first month of the year, the 2-year Treasury yield stands at 1.55% and the AAA municipal general obligation bond yields 0.90%. The 10-year Treasury yield is down 9 basis points on the year to 1.82% while the comparable high grade muni yield is 15 basis points lower at 1.29%. The 30-year Treasury yields 2.28%, down 10 basis points from the start of the year, and the 30-year muni yields 1.94%, 15 basis points lower. Baa corporate bond benchmark yields are down 13 basis points to 3.57%. The Russell 2000 Index is up nearly 2% to 1,699, oil prices are down 4.1% to $58.54, and gold prices have risen 2.3% to $1,557 an ounce. The normal ratios of stocks and bonds, municipal bonds and Treasuries, are askew. There are also increasing pressures for more socially conscious or green investing and attention to environmental credit risks and concerns about where markets are heading in this era of central bank interventions, high budget deficits and extraordinary debt levels.

At the 17th Annual HJ Sims Late Winter Conference next month in San Diego, we are fortunate to have Robert Genetski, as one of our keynote speakers. “Dr. G” is one of the nation’s leading classical economists who takes the voodoo out of the science and provides valuable insights on the impact of policy on growth. He is a Blue Chip interest rate forecaster who will endeavor to help us anticipate where we are heading as borrowers, investors, employers and citizens. We invite you to join us and participate by registering at this LINK.

The municipal bond market is still riding high thanks to favorable technical factors of supply and demand. Fund flows have been positive for 54 weeks; $5.1 billion of new investments in muni bond funds were made in the last two weeks. Bloomberg just reported that the last time tax-exempt yields were this low, Dwight Eisenhower was president and Elvis Presley was releasing his second studio album. Munis are outperforming the Treasury market and Muni-Treasury ratios in the 1-15 year range are at record 35-year lows. This week, the primary market calendar totals $7.1 billion, up from $5.4 billion last week. The high yield calendar includes nearly a dozen deals, including our $41.5 million revenue and refunding issue for Henry Ford Village, a continuing care retirement community with 852 independent living units, 96 assisted living units, and 89 licensed nursing care beds. The non-rated bonds are being issued by the Economic Development Corporation of the City of Dearborn, Michigan.

HJ Sims Leads Largest Refinancing for a Single Site Life Plan Community

FOR IMMEDIATE RELEASE

JANUARY 17, 2018

CONTACT: Tara Perkins, PR & Marketing Specialist | 203-418-9049 | [email protected]

HJ Sims Leads Largest Refinancing for a Single Site Life Plan Community

FAIRFIELD, CT– HJ Sims (Sims), a privately held investment bank and wealth management firm founded in 1935, announced the closing of a financing for NewBridge on the Charles (NewBridge), located in Dedham, MA. The $236,300,000 financing, which closed on December 19, 2017, marked the largest fixed rate public bond issue in 2017 for the refinancing of a single site Life Plan Community.

NewBridge is managed by Hebrew SeniorLife (HSL), one of Massachusetts’ largest not-for-profit healthcare organizations, with nine campuses in metro-Boston, conducting aging research and providing geriatric care education via its affiliation with Harvard Medical School. NewBridge consists of independent and assisted living, and a health care facility.

NewBridge was developed in 2007 with a $457 million tax exempt bond issue underwritten by Sims, the largest issue of its kind. Despite opening during the 2009 recession, NewBridge reached 96% independent living occupancy within 25 months. Sims is privileged to have partnered with HSL for 25 years, financing NewBridge and a sister community, Orchard Cove, in Canton, MA.

Long-term capital stability was a vital objective for NewBridge. With existing debt held by a consortium of commercial banks and a maturity in 2019 there was inherent refinancing risk and future interest rate uncertainty. Achieving the lowest possible debt service was critical to NewBridge.

Sims worked with HSL management to achieve an initial credit rating of BB+ (Stable) from Fitch. This rating, along with HSL’s commitment to NewBridge through the contribution of $6 million toward the debt service reserve fund plus the ability to issue bonds with a 40-year maturity, substantially lowered the annual debt service.

With considerable uncertainty in the tax exempt bond market regarding tax reform and a likely future prohibition on advance refundings, Sims included a five-year call provision in the bond structure, providing maximum flexibility to NewBridge.

Despite distribution restrictions ($100,000 minimum purchase) by the issuer for below-investment-grade rated bonds, $16+ million in bonds were sold to individual investors with  40 institutions purchasing the remaining bonds. Sims’ distribution strength provided lower than anticipated interest rates, from 1.85% (one-year maturity) to 4.125% (40-year maturity).

“The Sims team led a near seamless process for NewBridge’s $236.3 million public bond issuance. Sims’ deep knowledge of the tax exempt market and CCRC business model enabled HSL to obtain a favorable credit rating for NewBridge on a non-recourse basis. They did an excellent job as the book-runner, staging the co-manager to complement its own investor base to achieve a significant over-subscription and lower cost of capital for NewBridge. Sims’ quality of execution exceeded our expectations,” said James Hart, Chief Financial Officer, HSL.

For Financed Right® solutions please contact Andrew Nesi at 203-418-9057 | [email protected]For more information including risks, read the Preliminary Official Statement.

ABOUT HJ SIMS: Founded in 1935 on Wall Street, Sims is a privately held investment bank and wealth management firm with $2.2 billion of assets under management. Sims is one of the country’s oldest underwriters of tax-exempt and taxable bonds, having raised $22 billion for projects throughout the US. The firm is headquartered in Fairfield, CT, with investment banking, private client wealth management and trading offices nation-wide. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, is custodian of all client assets. Sims is not affiliated with NewBridge on the Charles or Hebrew Senior Life. www.hjsims.com/ourstory. Investments involve risk, including the possible fluctuation of principal. Member FINRA, SIPC. Follow us on LinkedIn, Facebook and Twitter.

HUD Goes All-In on OZs

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By Anthony Luzzi

The 2017 Tax Cuts and Jobs Act created a new tax incentive known as Qualified Opportunity Funds, to spur new investment in low-income communities located in certain Census Tracts that are designated by the Secretary of the Treasury as Opportunity Zones, or OZs. There are approximately 8,700 OZs nationwide and in the US Territories, including Puerto Rico, where approximately 94% of La Isla Encantada qualifies.

We’ll leave it up to the legions of lawyers and accumulation of accountants to describe the mechanics of investing in Opportunity Funds and how private investments in these OZs are eligible for potentially significant capital gains tax relief. But we can tell you about some of HUD’s recent initiatives to promote development and investment in OZs through its multifamily mortgage insurance programs.

HUD has designated specialized Senior Underwriters in each region of the country to process applications for mortgage insurance for properties in qualified OZs. This will ensure expert and expedient review of these applications by HUD underwriters.

Properties located in qualified OZs will be eligible for reduced mortgage insurance application fees. Market-rate and affordable deals will see their application fees reduced by 33%, from .3% to .2%. “Broadly affordable” deals will have a steeper 66% discount on its application fees, as they will be reduced from .30% to .10%. What’s a broadly affordable project? They have at least 90% of units covered by a Section 8 Project Based Rental Assistance (PBRA) contract; or at least 90% of its units covered by an affordability use restriction under the Low-Income Housing Tax Credit program.

Last summer, HUD Secretary Carson announced that the Section 220 mortgage insurance program, historically used to finance mixed-use rental projects in specially-designated “downtown” urban-renewal areas and other areas where local governments have undertaken designated revitalization activities, will now be available in all of the approximately 8,700 Opportunity Zones.

The introduction of Section 220 into all Opportunity Zones has the potential to be a game-changer, as HUD expects it will promote more economic activity, both commercial and residential, in low-income, economically distressed areas that have not experienced a great deal of growth in recent years.

Section 220 underwrites similarly to HUD’s “mainstream” Section 221(d)(4) program for multifamily new construction and substantial rehabilitation. Both have 40-year loan amortizations, loan-to-cost ratios ranging from 85% to 90%, and debt service coverage ratios from 1.11 to 1.17. Both programs limit the maximum amount of commercial space to 25% of the total project area, but under Section 220, the maximum amount of commercial income in a project can be 30% of the total income, double the Section 221(d)(4) limit. In addition, under Section 220, 20% of the cost of project’s non-residential components can be added to the calculation of the mortgage based on statutory unit limitations; the Section 221(d)(4) limit had been 15% until recently, when it was increased to 20%.

We applaud the intent of the Tax Cuts and Jobs Act to spur economic development in disadvantaged communities, and HUD’s efforts to maximize the impact of the Act through its multifamily mortgage insurance programs. We are currently developing a mortgage insurance application for a Louisiana rental project in an urban area that also is designated an OZ. Keep tuned to this space for updates on this deal.

Market Commentary: On the Cusp of Another New Year

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In Chinese folklore, the Jade Emperor decided that there should be a way of measuring time and settled on a 12-year calendar. To designate the years, he decided to host a competition for naming rights. On his birthday, he called for a swimming race and invited all animals to participate. The first twelve to cross a wide river would win a spot on his new zodiac calendar. So the great race began and the quick-witted Rat convinced the kind and powerful Ox to give him a ride on his back. The Ox moved rapidly into the lead but, just as he reached the river bank, the Rat jumped off and finished ahead of him, earning his position as the first zodiac sign. The peeved Ox was followed by the Tiger, Rabbit, Dragon, Snake, Horse, Goat, Monkey, Rooster, Dog and Pig, the final order of the zodiac.

Rats have long symbolized wealth and surplus in Chinese culture. They are said to be savers, but lack courage and can be stingy. Their love for hoarding can sometimes cause them to waste money on unnecessary things. Those born in the Year of the Rat are considered clever and industrious. The most recent Years of the Rat were in 2008, 1996, 1984, 1972 and 1960, half of which were good for stocks, half for bonds, none good for both. The next one begins on January 25, the Lunar New Year, which always occurs on the second new moon after the winter solstice. Feng shui grand masters see this year as the start of a new age. Many expect slowing growth, radical positions, impassioned protests, and more tension between countries. Some see great opportunities for wealth with best performances coming from energy, entertainment, land development, technology, and banking.

China’s Vice Premier Liu He, born in the Year of the Dragon in 1952, will be in Washington on Wednesday to sign a partial trade deal with President Trump, born in the Year of the Dog in 1946. The trade war between the two superpowers has generated much uncertainty for global investors for the last two years. And although markets cheer the accord, and relief to some businesses comes with the Phase One truce, for the time being tariffs continue to impact chemical makers, apparel retailers and auto parts manufacturers. A substantial percentage, perhaps close to two-thirds, of everything Americans buy from China will still be tariffed.

2020 in the Gregorian calendar is a leap year. It is a decennial census year, a presidential election year, and a year in which the United Kingdom and Gibraltar are scheduled to leave the European Union. Tokyo hosts the Summer Olympics, the World Expo opens in Dubai, and NASA launches a rover mission to study the habitability of Mars. The financial markets will focus on the eight scheduled meetings of the Federal Open Market Committee, beginning on January 28, but will also pay close attention to the Democratic primaries which start on February 3 and conclude with the convention in Milwaukee on July 16.

The new trading year began with the targeted U.S. MQ-9 Reaper drone airstrike that killed Iran General Qassem Soleimani followed by the deployment of 3,500 additional U.S. troops to the Middle East. Markets were roiled and investors fled to safe havens out of concern for retaliations and an escalation of conflict. Once Iran appeared to stand down, tensions very quickly faded and the U.S. rallies resumed. At this writing, the Dow is up 368 points since the start of the year, the S&P 500 is up 57 points, and the Nasdaq is up 301 points or 3.4%, while the Russell 2000 Index of small cap companies manufacturing or producing goods in the U.S. is basically flat at 1,668. Oil prices spiked briefly but have settled in the $59 range, down nearly 5% in 2020. Gold prices have gained $27 an ounce and stand at $1,549.

The bond market continues its 30-plus year-long rally, buoyed further by the temporary flight to quality. Although the 2-year Treasury yield is up 2 basis points on the year to 1.58% at this writing, the 10-year benchmark has fallen 7 basis points to 1.84% and the 30-year yield is down 8 basis points to 2.30%. $8.19 billion was added to high grade corporate bond funds in the opening week of 2020, and high yield funds reported inflows of $1.12 billion. Ten-year Baa corporate bond yields have dropped 11 basis points to 3.59%.

Municipal bonds are still on a tear. Yields, as measured by the AAA general obligation MMD scale, have compressed by another 10 basis points. The 2-year is at 0.94% and the 10-year at 1.35%. The 30-year benchmark at 1.98% is 105 basis points lower than where it stood one year ago. Continuing the 53-week pattern, municipal bond mutual fund inflows continue to set new records. Investors added an astonishing $2.89 billion into state and local government debt funds during the first, traditionally sleepy, week of January. More than $612 million was added to high yield funds.

During the first full week of issuance, $5.9 billion of bonds were issued and the high yield muni sector saw little activity. The California School Finance Authority sold $32.3 million of non-rated revenue bonds for Arts in Action Charter Schools that came with a 40-year final maturity priced with a 5.00% coupon to yield 3.67%. And the Build NYC Resource Corporation issued $9.3 million of non-rated revenue bonds structured with a 30-year term bond priced at 5.00% to yield 4.00%. This week’s $6.6 billion slate include a $23.5 million non-rated South Carolina Jobs-Economic Development Authority deal for Hilton Head Christian Academy. The 30-day visible supply of visible bonds totals $12.3 billion. On the cusp of a new calendar used by one quarter of the world’s population, we join in wishing all a Happy New Year.

What You Need to Know about Electronic Wills

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By Megan Morrow

While most adults believe that wills are important, less than half of them actually have one, according to a recent survey, the chief reason being that “I have not gotten around to it yet.” Designed to make the process of creating a will easier and more accessible for all, electronic wills have previously required printing and signing on the dotted line in front of a witness. While e-signatures are common and widespread, e-notarization is not.

However, Indiana and Nevada have passed laws permitting e-signatures while Arizona and Florida are expected to adopt such legislation in 2020, with more states to follow. This sets the stage for expanded use of electronic wills that can be wholly completed online.

The Uniform Electronic Wills Act was adopted by the Uniform Law Commission to create a model for executing a will with online technology that other states can follow. In essence, those who wish to create an electronic will could do so online, then connect with a notary via video chat. The notary can talk with the individual and ask any pertinent questions before notarizing the will and returning it. The electronic will is constituted as valid, without the testator ever having to be in the physical presence of the notary.

Benefits of electronic wills include access, availability, convenience and simplicity. No matter where you live or what your schedule, you can create a valid will on your own time table.

Concerns with electronic wills center on fraud – particularly the possibility of undue influence or duress in the creation of the document. Likewise, without the advice of an attorney, individuals could use boilerplate wills that lack the details or specificity that their estate requires. A one-size-fits all will, naturally, will not work for everyone. Issues with revocation and storage also remain to be further determined.

At present, electronic wills might be ideal for younger people – only one in five Millennials have a will – or those with fewer assets and complications. With more states expected to adopt electronic will legislation in the coming years, options for online wills are anticipated to grow as well.

We want to hear from you

Do you have a topic suggestion for an article in a future issue of Sims Insights newsletter? We would love to hear from you. Share your ideas here.

The material presented here is for information purposes only and is not to be considered an offer to buy or sell any security. This report was prepared from sources believed to be reliable but it is not guaranteed as to accuracy and it is not a complete summary of statement of all available data. Information and opinions are current up to the date of publication and are subject to change without notice. The purchase and sale of securities should be conducted on an individual basis considering the risk tolerance and investment objective of each investor and with the advice and counsel of a professional advisor. The opinions expressed by Ms. Morrow are strictly her own and do not necessarily reflect those of Herbert J. Sims & Co., Inc. or their affiliates. This is not a solicitation to buy or an offer to sell any particular investment. All investment involves risk and may result in a loss of principal. Investors should carefully consider their own circumstances before making any investment decision.