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504 Rate Update

504 November 2015 Rates


4.176% – 10 Year Debenture Effective Rate *

4.778% – 20 Year Debenture Effective Rate *


The Last Hurrah!
So the near decade of ultra-low interest rates end, not with a whimper, but the BANG of 271,000 new jobs. With that coda, attention now turns to the future of the yield curve.

Chart and Statistical Data is from May 2006 to November 2015

Debenture Rate 10 Year T-Note
Spread Over T-Note
November 2015
2.24% 0.46%
2.99% 0.84%
2.86% 0.65%
0.009470505 0.005829078
Think Kansas.
Flat. Why? The merest glimmers of inflation barely show on the US economic horizon. On the international front: the Chinese economy just logged its’ 44th consecutive monthly deflationary reading in the PPI, the Japanese and European central banks are still pushing the QE string, and oil prices are drowning in a supply glut projected to run through 2020.
So what is the appeal of the 504 product as a fixed rate?
How about the notorious ability of economic forecasts to be something less than accurate?
504 is a risk management product: for both a lender and a borrower. By taking rate risk off the table for the full life of the loan on thirty to forty percent of the total credit profile a lender earns the rightful gratitude of both their borrower and those tasked with their institution’s Asset/Liability management.

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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