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504 Rate Update

504 July Rates

4.326% – 10 Year Debenture Effective Rate *

4.961% – 20 Year Debenture Effective Rate *

James Carville once observed that in his next life, he wanted to come back as something really powerful, like “The Bond Market”.

Perhaps in a demonstration of that power, “The Bond Market” has, over the past four months, despite a slight upward trend in the Ten Year Treasury Note, been remarkably sanguine.  The underlying twenty year debenture has stayed within a roughly forty basis range, in keeping with the range of the Ten Year Treasury.  Consider that this has occurred while Chinese equities have been experimenting with gravity, Greek and Puerto Rican debt markets have proven a correlation between economic reality and gravity, and according to a recent survey, over 80% of bond traders expect rate increases.

2015 July

Chart and Statistical Data is from May 2006 to July 2015

Debenture Rate 10 Year T-Note
Spread Over T-Note
July 2015
2.27% 0.61%
3.02% 0.84%
2.94% 0.66%
0.009513907 0.005914787

But rather than wax philosophical, why not just lock rates and fix your costs of occupancy?

The appeal of the 504 program is not just in the low down payment afforded to a borrower, the long term fixed rate also provides a basis for long term financial stability.

If the possible interruption of funding through the 7(a) program, have your borrower looking for that greater sense of stability, point them to the 504.  The points saved in fixed rates will benefit you both.

We welcome the opportunity to earn your business

* Note: Rates are subject to credit determination & auction pricing. Past performance is no guarantee of future results.

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South Central Tennessee Development
101 Sam Watkins Blvd.
Mount Pleasant, TN 38474
Office (931) 379-2918
Fax (931) 379-2640

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