Star News

As European nations from Greece to Spain are rebuked by bond buyers demanding higher yields, interest rates of all maturities of U.S. Treasuries have dropped. The average Treasury yield is down 2.75% from one year ago despite the 20% increase to $7.96 trillion of outstanding marketable debt.

The market's advocates of fiscal discipline are being placated as Fed Chairman Bernanke keeps benchmark interest rates at a record low, allowing them to profit from the gap between short and long-term yields with inflation at its lowest in four decades.

After losing 3.72% in 2009, U.S. debt, the most liquid of fixed-income securities in the world, has returned 4.49% since December, the best start to a year since gaining 5.81% during the same period in 2003. Ten-year Treasuries yielded 3.19% today, down from this year's high of 4% on April 5th.

While yields are low on an absolute basis, they're relatively high by other comparisons. The yield on 10-year notes is 2.54 percentage points higher than 2-year notes, more than double the average of about 1% since the 1980s. After taking consumer prices into account, with the exclusion of food and energy, the yield equals 2.33%, up from last year's low 0.71% in January. We will keep you posted…

Non-Recourse Single Tenant Loans from $2 Million to $40 Million

Penstar is currently working with a capital provider originating non-recourse loans on single tenant properties located throughout the United States ranging from $2 million to $40 million. The lender will advance on industrial, office, and retail properties that are well located and with strong sponsorship. They will consider funding on lesser credits as long as the companies demonstrate profitability, and can comply with lease terms of 6 years or more. Loans are for a 6-year term, fixed for 3 years at 6.5% and reset for the remaining 3 years at a spread above swaps. The maximum loan to value is 75% on today's value, with an amortization of 25 years. To learn more, please contact Steven Hamermesh at (818) 883-9609 or Hamer@PenstarAdvisors.com.

Helpful Humor

The best antidote for those challenging transactions is to take a moment to have a hearty laugh. Helpful humor is our way of infusing laughter into your work-week

“Ed…the Stock Market Investor”

Throughout my college years, I shared dormitory life with Ed, a fellow student who, quite the genius, also donned “Coke-bottle” eyeglasses and was known for rarely attending any of his classes, yet completed every exam with top grades. Ed sat in his dorm room in self-imposed confinement, the walls covered in stock charts and graphs, as he pored over the financial markets with intense scrutiny. Ed even used a makeshift computer, long before technology became portable and computers became about as affordable as ball-point pens.

Upon reaching our senior year, I became aware of the stark reality of having to make a living. I decided to sit down and talk with my fellow classmate. “Ed,” I announced, “I'll work as hard as I have to.” “Tell me how I can end up with a million dollars in the stock market.” I implored.

“Well,” he responded, scratching his head, “Start with two million.”