PRE- & POST-PURCHASE DUE DILIGENCE SERVICES
THE NEW REGULATORY GUIDELINES
Pre- and post-purchase analysis of investments are now required by Dodd-Frank. In accordance with Dodd- Frank, community banks cannot rely on the major rating agencies to determine the credit risk of a security. The guidelines have taken another step to have community banks confirm that the price of a security is fair.
S&B has tools that will provide a higher level of due diligence in complying with the guidelines. Depending on which service is applicable, S&B will prepare a pre-purchase report for your bank. The services can then be used for post-purchase credit analysis, as needed.
PRE-PURCHASE MUNICIPAL BOND RATINGS
When time is of the essence, S&B can provide rapid turnaround with the S&B Pre-Purchase Bond Rating. Due to complexity, revenue bonds may require additional time for analysis. Based on the guidelines S&B utilizes in its municipal bond ratings S&B will quantify a rating range. Management can use this rating range to determine if the municipal bond will meet the bank's policy guidelines. S&B will also provide the municipality's financials and pertinent demographic information with the pre-purchase analysis.
Clients may also choose to include the S&B Market Valuation in the pre-purchase analysis to provide higher due diligence on the fairness of the price of the security.
PRE-PURCHASE MUNICIPAL BOND RATING ........................................... $300
S&B will provide complimentary language for the bank's investment policy.
S&B MUNICIPAL BOND RATINGS
Gain added insight into your bank's municipal securities portfolio with the independent rating process of our investment analyst team. The S&B Municipal Bond Ratings determine the ability of the issuer to meet the debt obligations of the bond in the forthcoming years. S&B focuses on the integrity of the municipality's financial management. Subscription service is available to provide your bank with updated ratings.
Click on each report to learn more
|PRIORITY DUE DILIGENCE REPORT
The Priority Due Diligence Report is one of two Priority reports offered by S&B. The Priority reports are designed to meet the time demands of bankers purchasing new bonds or bonds available on the secondary market. The reports are also useful in receiving a general evaluation of credit risk in a portfolio.
In the Basic Report, S&B provides a breakdown of the rating components. The “S&B Scorecard,” a comprehensive financial data table, is provided at this level of reporting. Economic performance is also broken down and evaluated on a relative basis.
In the Detailed Report, S&B also provides a breakdown of the rating components. In addition to the S&B Scorecard, the Level 2 Detailed Report also features bullet points on the issuer’s strengths and weaknesses.
S&B Market Valuation is a tool for higher due diligence in determining if a security's price is fair. To determine a security's value, S&B uses two valuation methods. The first method is to determine if the security is fairly spread to the U.S. Treasury curve using S&B's proprietary pricing models. The second valuation is to get actual quotes from brokers who specialize in that type of security. S&B can value most security types in which community banks invest. These include U.S. Agencies, mortgage-backed securities, taxable municipals, tax-exempt municipals, and corporate securities.
This service is included with the S&B Pre-Purchase Analysis.
Upon request, S&B will provide complimentary language for the bank's investment policy.
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