Selling Bonds To Banks and Other Institutions
For aspiring or current brokers and managers, learn to sell bonds to large investors. Learn the market that has billions of dollars moved everyday. Banks, Credit Unions, and other institutions do not buy stock, they buy bonds. Best of all, unlike institutional equities investors, they buy from brokers. Learn who they buy from, what they look for, and how to market and sell to them.
This guide will also show how to obtain publicly available information on the institution, including the bonds and securuties they currently hold, and when they bought them. These institutions normally buy their bonds in increments of $250,000 - $5,000,000. Institutional brokers rely on fixed maturities of these securities for reinvestment. A terrific market, but you need to know what your doing first. This will show you how.
Learn the inner workings of the bond market which will give you a great edge to sell to institutional and wealthy investors. Having a strong book of bond investors can provide steady and growing money management opportunities.
"How To Sell Bonds" EBOOK!
Learn how to sell:
Mortgage Backed Securities
Floating or Adjustable rate bonds
And how to sell bonds to:
Million $ and up face value trades is commonplace in the Bond market and Institutional Clients
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Selling CDís and taking advantage of loan demand
"Banks and other institutions buy CDís offered by other banks. If you have banks that buy
CDís, and you have a bank that needs money, you can earn from that. Lets say your
investing bank is looking for a 3% 5 year CD (donít be alarmed by the low rates, as of
this printing, interest rates are at all time lows), The bank that is looking for money is
offering a rate of 3.25%. You can approach the deposit bank with providing them a
$100,000 deposit, not to exceed their total cost of 3.25%. You ask them if they pay for
deposits, if they do, you tell the bank to issue the CD to your bank at 3%, and then you
bill the deposit bank the .25 point spread between their cost and the CD rate you are
giving to your customer. A .25 point for a 3 year CD is $750. What if you had 10 banks
interested in 3 year CDís? Thatís $7500. Your client banks would wire the money in.
Each deposit is fully insured, the bank sends them a receipt, and your done.
You also could do this with banks that are not as loaned out, but are looking to make a
spread between their deposit rates, and a higher fixed income investment that you have.
Letís say there is a 4% corporate bond for 3 years that is available, and the deposit bank
is paying 3.25% for 3 year deposit CDís. If you can provide the bank with a CD at a total
cost of 3.25%, and then take that money and invest it in a corporate bond, you made a
spread for the bank, and you made money on both ends. The deposit spread, and the mark
up on the corporate bond trade. These kinds of trades are simple to present and execute.
The one objection you will encounter from some is the bank does not accept ďBrokered
DepositsĒ. Brokered Deposits are large time deposits that are listed as ďbrokeredĒ,
meaning, it was arranged through a broker. Some banks only consider deposits as
brokered if they pay a fee for the deposit.
Types of Bonds To Sell To Banks
If you want to make good money with banks, or any institution, Government and agency
bonds are where it is. Simply because all Government bonds and agencies are AAA rated,
and banks can buy millions of dollars of any bond without incurring any credit risk.
All banks own bonds of some sort, and they are buying them from brokers. Our primary
- U.S. Treasury obligations (T-bills, T-notes, T-bonds)
- Government Agency Debt (GNMA)
- Private Agency Debt (FNMA, FHLMC, FHLB and others)
- Mortgage Backed Securities (Passthroughs, CMOís, ARMís)
- Municipal Bonds - in some cases
- Investment Grade Corporate Bonds"
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