BLX assists its clients to formulate, execute, and monitor investment strategies tailored for the special considerations that arise with tax-exempt bond proceeds and similar restricted funds. Structured Products, including guaranteed investment contracts, forward delivery agreements, repurchase agreements, and similar arrangements, typically constitute an important part of our client's investment portfolios.

Not a Trivial Matter

Investment decisions should not be a casual after thought, or treated as a trivial matter. They are second only to the decisions on how to borrow the proceeds in terms of direct impact on the economics of the financing. Careful considerations must be given to Federal tax law, in terms of compliance, as well as optimization, under the complex rules and regulations. As a result, many of the nation's largest and most sophisticated tax-exempt bond issuers turn to BLX for Structured Product services. BLX has a proven track record and is highly regarded for its reliable service and reputation for integrity.

BLX is virtually unique in its depth of resources and ability to design and implement strategies. Along with identifying appropriate safety, liquidity, and yield characteristics of a candidate structured product, the firm has the tax regulatory expertise to build prospective arbitrage rebate models that rigorously compare alternative investments, accounting for the additional costs and benefits of options that can be incorporated into the structure of the investment.

Complex Approach but a Simple Result

For the end-user, much of the benefit is in the simplicity of the end product. A Structured Product offers an elegant and concise solution that is designed to minimize administrative burden. Although there most likely will be issues to be identified and addressed, BLX works to make the process seamless and safe.

Disciplined Approach

Inherent in all of BLX's investment advisory services is a disciplined approach to identifying, procuring and monitoring a particular investment of bond proceeds (or portfolio thereof). Specifically, BLX will:

1. Review the mechanics of your bond issue(s), your available investment alternatives, and projected expenditure schedules.
2. Construct comprehensive, prospective arbitrage rebate models.
3. Prepare an investment recommendation that isolates the best investment strategy.
4. Execute and properly document the chosen strategy, making sure that purchases of securities and/or investment products are in compliance with the so-called "safe harbor" requirements of the Treasury Regulations.
5. Monitor the bond issue and the underlying investments to ensure that changes in the interest rate environment, counter-party ratings, and the bond issue itself (e.g. refunding) are appropriately accounted for on a prospective basis.

Should I wait Until Rates Go Up?

Nobody can predict the magnitude and direction of future changes in interest rates. BLX can, however, assist you in devising and implementing an investment strategy that incorporates the risks and opportunities associated with investing in the prevailing interest rate environment, and is "stress tested" to forecast how changes in the prevailing interest rate environment may affect that strategy.

To learn more about our Structured Products, please contact:

Eric Chu
Managing Director
Phone: 213.612.2136
echu@blxgroup.com
Or call Eric toll-free at 866.342.5259