Updates on the U.S. Economy, Investment Markets, and Financing Strategies Prepared for: March 6,...
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Transcript of Updates on the U.S. Economy, Investment Markets, and Financing Strategies Prepared for: March 6,...
Updates on the U.S. Economy, Investment Markets, and Financing StrategiesPrepared for:
March 6, 2014
Bill KielczewskiSVP - Managing DirectorInstitutional InvestmentsHuntington Capital [email protected]
Dan VandenBoschVP - DirectorPublic FinanceHuntington Capital [email protected]
Introduction and Overview
Global Economic Growth – slow recovery continues
3
The IMF projects World Output to grow at 3.7% for 2014, up from 3.0% in 2013.
“The basic reason behind the stronger recovery is that the brakes to the recovery are progressively being loosened,” said Olivier Blanchard, the IMF’s chief economist and director of its Research Department. “The drag from fiscal consolidation is diminishing. The financial system is slowly healing”.
World Output 2012 2013 2014 2015
Advanced Economies 1.4% 1.3% 2.2% 2.3%
• United States 2.8% 1.9% 2.8% 3.0%• Euro Zone -0.7% -0.4% 1.0% 1.4%• Japan 1.4% 1.7% 1.7% 1.0%• United Kingdom 0.3% 1.7% 2.4% 2.2%
Emerging and Developing Countries 4.9% 4.7% 5.1% 5.4%
• China 7.7% 7.7% 7.5% 7.3%• India 3.2% 4.4% 5.4% 6.4%• Latin America and Caribbean 3.0% 2.6% 3.0% 3.3%• Middle East and North Africa 4.1% 2.4% 3.3% 4.8%
Source: IMF website
4
All 4 of the worlds major central banks have implemented some form of quantitative easing in an attempt to increase their domestic growth rate.
Globally, interest rates have increased year over year. With growth projected at 3.7% and inflation rates near or below growth rates, how much higher can they go?
Global Economic Growth – Interest rates, FX, and global Q.E.
Country Credit Ratings
Debt % GDP
10 Year IR
10 Year IR change YoY
CPI YoY Unemployment Rate
Currency % change YoY (USD)
United States AA Aaa 70% 2.68% 0.73% 1.50% 6.60% 0.00%
United Kingdom AAA Aa1 89% 2.71% 0.62% 2.00% 7.10% 4.79%
Germany AAA Aaa 81% 1.66% 0.05% 1.30% 6.80% 1.59%
Italy BBB Baa2 127% 3.68% -0.86% 0.70% 12.70% 1.59%
Japan AA- Aa 219% 0.61% -0.15% 1.60% 3.70% 8.64%
Australia AAA Aaa 32% 4.14% 0.67% 2.70% 5.80% -12.78%
China AA- Aa3 32% 5.50% 0.88% 2.50% - -2.77%
India BBB- Baa 52% 7.50% 0.89% 9.13% - 15.00%
Brazil BBB Baa2 59% 4.75% 1.91% 5.59% - 20.90%
Source: IMF website
U.S. Economy – can we reach our projected 3.0% GDP growth
5
The Federal Reserve projects U.S. GDP growth of 3.0% for 2014. Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, said he
expects the economy to expand 3 percent in 2014 as the jobless rate falls to 6.2 percent by year-end, warranting a quicker tapering to bond purchases by the central bank.
Policy makers made the first two cuts to asset purchases in December and January, slowing to $65 billion a month from $85 billion.
“My preference is to scale back our purchase program at a faster pace to reflect the strengthening economy,” he said in a speech in Rochester, New York. “We must begin to back away from increasing the degree of policy accommodation in a manner commensurate with an improving economy,”
Source: Bloomberg
U.S. Economy – Is this the best we can do
6
Leading Economic Indicators in February was 0.3% versus survey expectations of 0.3%. The 40 year average for the U.S. is 0.1%. 1974-2014
Source: Bloomberg
U.S. Economy – Is this the best we can do
7
LEI Leading Credit Indicators Index shows credit expansion slowing. Average rate of the LCI index over past 25 years is 0.1%. The current reading is -1.90%. 1990-2014
Source: Bloomberg
U.S. Economy – Is this the best we can do
8
Durable Goods Orders are negative for both readings thus far in 2014. The current reading is -1.0%; last months number was revised down to -5.30%. Both are well below our 0.8% historical average. 1994-2014
Source: Bloomberg
U.S. Economy – Is this the best we can do
9
Construction Spending shows signs of stabilization. The bottom looks to have been formed in 2009 and we are trending back to our historical average. The current reading is 0.1% vs. historical average of 0.5%. 1993-2014
Source: Bloomberg
U.S. Economy – Home Prices Rebound
10
Home Prices in the U.S. have bounced back from their 15 year lows during the credit crisis. Will this trend continue without the Fed’s Q.E. support?S&P/Case-Shiller Home Price Index 1994-2014
Source: Bloomberg
U.S. Economy – How are Homes Sales
11
Home sales in the U.S. have slowed to -9.10%. Is there a correlation between buying a home and Government intervention in the market place? See below: Stimulus Package 1st Time Home Buyer Tax Credit / QE’s 1-3 / Fed TaperingU.S. Pending Home Sales Index YoY. 2002-2014
QE 1 starts in 11/08
1st Time Home Buyer Tax Credit added to Stimulus Package. 2/09
QE2QE 2 11/10
QE 3 9/12
QE2Fed announced “Tapering”
Source: Bloomberg
U.S. Economy – Is Corporate America hiring
12
U.S. job openings are picking up after the “great recession” and we have made our way back to 2004-2008 hiring levels. Are there enough “qualified” employees in our underemployment bucket to fill these new positions? 2000-2014
Source: Bloomberg
U.S. Economy – Unemployment Rate at 6.60%
13
We are very close to the Federal Reserves 6.50% desired rate which they state will allow them to slow their accommodative policy. Will they follow through with an end to QE and look to raise the overnight rate anytime soon, or, change their playbook with the recent weakening economic data?
Source: Bloomberg
U.S. Economy – Underemployment rate at 12.70%.
14
Do we have a “structural” employment problem within the U.S.?
We are well off the high rate of 17.20%, but, we are also 5 years out from the start of the “great recession”. Why can’t these folks in the underemployment index match up with all the new hiring opportunities presented in the JOLT Index?
38% of business owners surveyed in the January 2014 NFIB say they can not find “qualified workers” in the U.S. work force. 1994-2014
Source: Bloomberg
Investment Strategies
Investing in the Current Market
16
Quantitative Easing and Federal Funds Rate Discussion
The Federal Reserve has held the U.S. overnight rate near zero for the last 4.5 years. In their most recent meetings they started to “taper” Government Bond purchases by $10 Billion dollars. Most economists expect the Fed to continue with tapering and end their bond purchasing program (Q.E.) by the end of 2014.
The Federal Reserve has also said that they will hold the target interest rate for Federal Funds Rate at 0 to 0.25 at least as long as unemployment remains above 6.5% and inflation remains below their accepted level of 2.0 – 2.50%.
The Unemployment rate fell to 6.6%, but, the participation rate within that survey fell to 63%, near the lowest level since 1978. Inflation data for the U.S. in March showed the Fed’s favorite gauge, PCE core YOY, was at 1.10%.
The market has started to adjusted to “tapering”, economic data, and the Federal Reserves forward guidance on rates by extending the dates at which it anticipates the overnight rate to increase. Please see the Chicago Board of Trades Fed Funds Futures Contracts on the next slide for expected date and rate changes.
18
Bond Strategies; Portfolio Ladders and Barbells
Ladder Strategy / Asset-Liability MatchStaggers maturities of bonds in a portfolio and sets a schedule for reinvestment of proceeds
Tota
l Por
tfol
io
Benefits:• Periodic maturities allow you to control liquidity based
upon anticipated needs• Interest rate volatility is reduced as portfolio is spread
across different maturities and coupons• Proceeds from the maturing investment can be used
for the scheduled draw, or reinvested in another investment if it is not needed.
Barbell StrategyUtilizes only short-term investments and longer term bonds
Tota
l Por
tfol
ioBenefits:• Longer-term bonds provide higher interest rates, while shorter-
term bonds provide liquidity• Can help to mitigate risk of owning longer-term bonds in a rising
(or anticipated to rise) interest rate environment by allocating just a portion of investments to longer-dated securities
• Maturities of shorter-term bonds can be reinvested in different types of bonds or other securities should market conditions change
Po
rtfolio
Matu
rity
Po
rtfolio
Matu
rity
Investing in the Current Market – “Roll down” the yield curve and use it’s “steepness” to your advantage.
Changes in the U.S. Yield Curve 2010 / 2012 / 2014
19Source: Bloomberg
Fixed Income Options for MI Government Entities: Overview
20
Time Horizon
Short-Term(12 months and < )
Intermediate / Long Term(> 12 months)
Relativ
e Risk
Risk-Free• Treasury Bills
• Agency Discount Notes• Government MMKT
• Treasury Notes/Bonds• Agency Notes/Bonds
Low• Bank Deposit / MMKT Accounts
• Bank Certificates of Deposit• Commercial Paper (IG A1/P1)
• Agency MBS• Callable Agency Bonds
• MI Municipal Notes/Bonds
Moderate
Financing Outlook and Strategies
Municipal Yields (Last 5 Years)
22
The MMD "AAA" curve is written daily to represent a fair value offer-side of the highest-grade AAA rated state GO's, as determined by the MMD analyst team.
Source: Thomson Reuters. As of March 3, 2014.
5 Years Ago
Today1 Month Ago
3 Months Ago
1 Year Ago(%)
(Years)
CurrentOne
Month AgoThree
Months AgoOne Year
AgoFive Years
Ago1 0.15 0.17 0.18 0.20 0.482 0.25 0.34 0.35 0.33 1.223 0.41 0.49 0.62 0.46 1.324 0.66 0.80 0.93 0.59 1.535 0.96 1.14 1.31 0.74 1.756 1.37 1.57 1.65 0.88 1.977 1.71 1.94 1.97 1.09 2.168 2.01 2.24 2.26 1.30 2.379 2.22 2.46 2.45 1.50 2.59
10 2.35 2.62 2.62 1.68 2.8211 2.49 2.76 2.79 1.78 3.1012 2.62 2.89 2.95 1.86 3.3713 2.75 3.03 3.11 1.94 3.5514 2.86 3.15 3.26 2.01 3.7215 2.97 3.25 3.39 2.08 3.8916 3.07 3.35 3.52 2.14 4.0117 3.16 3.44 3.64 2.20 4.1218 3.24 3.53 3.72 2.26 4.2319 3.31 3.60 3.80 2.32 4.3420 3.36 3.66 3.86 2.38 4.4221 3.41 3.72 3.93 2.44 4.5122 3.46 3.77 3.99 2.50 4.5623 3.5 3.82 4.05 2.56 4.6124 3.54 3.85 4.10 2.62 4.6625 3.58 3.88 4.14 2.66 4.6926 3.61 3.91 4.17 2.68 4.7027 3.63 3.94 4.19 2.69 4.7128 3.65 3.96 4.21 2.70 4.7229 3.66 3.97 4.22 2.71 4.7330 3.67 3.98 4.23 2.72 4.74
1 3 5 7 9 11 13 15 17 19 21 23 25 27 290
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
• 10 year Michigan Municipal Bonds are currently trading at a 0.65% spread to “AAA” MMD 10 year Bonds. (Illinois Muni Bonds are trading at a 1.20% spread)
Municipal Bond Funds Suffered in 2013 but Investors are Starting to Come Back
23
MUNICIPAL BOND FUND FLOWS – 2009 - PRESENT
Source: ICI Institute..
Feb-09 Aug-09 Feb-10 Aug-10 Feb-11 Aug-11 Feb-12 Aug-12 Feb-13 Aug-13 Feb-14-20,000
-15,000
-10,000
-5,000
0
5,000
10,000
15,000Municipal Bond Fund Flows ($Bil)
Emergence of the Taxable Market
Taxable municipal issuance increased 17% in 2013 Approximately 40% of taxable proceeds were
used for the refunding of outstanding indebtedness
The receptiveness from “cross-over” buyers in municipal offerings shows the trend of an emerging market that started out of the Build America Bond ProgramThe added buyer universe continues to add depth and liquidity to the municipal market
24Source: Bond Buyer, Offering Documents
Source: Bond Buyer
TAXABLE ISSUANCE VOLUME
$32,832
$38,364
2012 2013 -
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Refunding New Money Combined
($ mil)
With a Sharp Decline in Refunding's, New Bond Issues Fell 12.5% in 2013
25
MUNICIPAL MARKET ISSUANCE - 2004 – 2013
Source: Bond Buyer
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
$450,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
$359,748
$408,283
$388,838
$429,894
$389,632
$409,689
$433,269
$287,718
$379,519
$329,807
$000
Michigan Municipal Market Issuance
26
Michigan Municipal Issuance
Source: Michigan Municipal Advisory Council
Michigan Community College Issuance 2011 - $14,320,000 (1 Bond Issue)2012 - $92,065,000 (7)2013 - $44,465,000 (6)
0
50,000
100,000
150,000
200,000
250,000
300,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
82,41377,62476,25976,81978,996
89,46790,60194,897
99,160106,457
114,029115,859126,178
138,877145,013
147,443158,726
175,939
213,190
263,196
274,336
$ mil
But How Much Are We Missing As Borrowers Utilize Direct Bank Placements?
27
UNITED STATES FINANCIAL INSTITUTIONS – MUNICIPAL HOLDINGS
86% Increase
since 2008
Source: Bond Buyer
Rating Changes
Pension Adjustment Steps
• Allocates cost-sharing plan liabilities
• Discounts accrued liabilities using a market discount rate
• Determines the value of plan assets
• Calculates adjusted net pension liability
• Amortizes adjusted net pension liability
• Applies to calculation versus full value and to revenue
30
Refunding Opportunities
Refunding
What is a Refunding?
• Issuance of new debt at lower interest rates to replace debt which is currently outstanding at higher rates
• A refunding of debt can also entail the issuance of new debt at either lower or higher interest rates to restructure the payments on existing debt.
• Budget relief• Creates debt service capacity for new money
• Factors that make a refunding work:• Lower Interest Rates• Time
• Savings Target: 3% in minimum present value savings
32
Refunding - Continued
• Current – refunding completed within 90 days of the call date on the bonds being refunded
Bond holders are notified and bonds are paid off
• Advance – refunding completed more than 90 days before the call date on the bonds being refunded
• Long Escrow period – escrow reinvestment rate is critical• Only one advance refunding of a new money bond issue is permitted by the
IRS• Proceeds are “Escrowed” until call date then bond holders are paid off
33
Refunding - Continued
• Typically, 10 Years after the original borrowing, a 20 year bond interest rate can be replaced with a 10 year bond interest rate
• Today’s market allows issuers to capture:
1) Rolling down the Yield Curve
2) Historically Low Rates
3) Steep Yield Curve
34
Example – Tax Exempt Refunding
35
Dated Date 5/1/2014Arbitrage yield 2.08625%Escrow yield 0.10028%Value of Negative Arbitrage $55,835
Bond Par Amount $4,890,000True Interest Cost 2.17280%Net Interest Cost 2.22529%Average Coupon 2.65407%Average Life 6.1232106
Par amount of refunded bonds $4,750,000Average coupon of refunded bonds 4.86854%Average life of refunded bonds 6.4549123
PV of prior debt to 05/01/2014 @ 2.086251% $5,624,848Net PV Savings $582,614Percentage savings of refunded bonds 12.26555%Percentage savings of refunding bonds 11.91439%
SourcesBond Proceeds Par Amount $4,890,000
Premium $152,836$5,042,836
UsesRefunding Escrow Deposits Cash Deposit $0.92
SLGS Purchases $4,968,883
Delivery Date Expenses Cost of Issuance $73,350
Other Uses of Funds Additional Proceeds $602$5,042,836
Example – Tax Exempt Refunding
36
DatePrior Debt
ServiceRefunding Debt
Service SavingsPresent Value
Savings12/1/2014 $221,735 $185,844 $35,891 $36,60212/1/2015 $611,735 $551,675 $60,060 $58,67412/1/2016 $612,695 $552,275 $60,420 $57,76212/1/2017 $612,710 $550,600 $62,110 $58,10412/1/2018 $611,750 $548,850 $62,900 $57,58612/1/2019 $610,000 $549,750 $60,250 $53,98412/1/2020 $612,250 $550,450 $61,800 $54,16612/1/2021 $608,250 $546,200 $62,050 $53,22312/1/2022 $613,250 $551,650 $61,600 $51,70812/1/2023 $611,750 $551,500 $60,250 $49,49112/1/2024 $609,000 $545,900 $63,100 $50,711
Total $6,335,125 $5,684,694 $650,431 $582,012
Savings Summary
Taxable Refunding
37
• Advance refunding rules only apply to tax-exempt debt
• Issuers are permitted to refund an issue more than 90 days prior to the call date even if the issue has been advance refunded once if it uses taxable debt
• For the first half of 2013 spreads between taxable and tax-exempt rates were very narrow making it a very good tool to use
• Spreads have widened out and with the expectation that rates will remain low through 2014 it may make sense to wait to be able to use tax-exempt rates if an issue is callable 11/1/14 and becomes an current refunding as of 8/1/14
Build America Bonds
Build America Bond’s
• Build America Bonds are a taxable municipal bond program enacted by congress in 2009 and extended through December 31, 2010.
• The taxable bonds receive an interest subsidy(originally 35%) and at the time a comparable if not a lower cost option to tax-exempt bonds.
• On March 1, 2013, approximately $85 billion of federal budget cuts went into effect, meaning all subsidy payments for direct-pay municipal bonds, including BABs, to be paid between that date and Sept. 30 would be reduced by 8.7% through 9/30/13 and 7.2% from 10/1/13 to 9/30/14.
• With the subsidy cut, issuers started to look to redeem Build America Bonds at par plus accrued interest because they believe the cuts in their federal subsidy payments under sequestration has triggered the extraordinary redemption provisions in their bond documents.
• The bond documents said an “extraordinary event” would occur and trigger a call if there was a change to the federal tax code, pursuant to which the federal subsidy payment is reduced or eliminated.”
39
Build America Bond Structure
40
Period
Ending
Total Debt
Service SubsidyNet Debt
Service
12/1/2013 1,654,412.50 -527,729.52 1,126,682.98
12/1/2014 1,684,142.50 -527,643.14 1,156,499.36
12/1/2015 1,757,252.50 -527,038.44 1,230,214.06
12/1/2016 1,646,312.50 -525,137.94 1,121,174.56
12/1/2017 1,646,042.50 -525,051.54 1,120,990.96
12/1/2018 1,690,772.50 -524,965.16 1,165,807.34
12/1/2019 1,903,072.50 -524,101.30 1,378,971.20
12/1/2020 1,888,762.50 -519,522.82 1,369,239.68
12/1/2021 1,971,868.76 -514,117.66 1,457,751.10
12/1/2022 1,973,600.00 -506,672.82 1,466,927.18
12/1/2023 1,923,737.50 -498,718.06 1,425,019.44
12/1/2024 1,995,468.76 -491,273.22 1,504,195.54
12/1/2025 2,361,143.76 -481,890.70 1,879,253.06
12/1/2026 2,292,362.50 -463,083.64 1,829,278.86
12/1/2027 2,474,268.76 -444,496.54 2,029,772.22
12/1/2028 2,474,675.00 -420,630.26 2,054,044.74
12/1/2029 2,474,925.00 -395,114.26 2,079,810.74
12/1/2030 2,559,675.00 -367,838.52 2,191,836.48
12/1/2031 2,524,500.00 -337,387.28 2,187,112.72
12/1/2032 2,514,250.00 -302,112.78 2,212,137.22
12/1/2033 2,796,500.00 -264,438.68 2,532,061.32
12/1/2034 2,898,750.00 -217,166.06 2,681,583.94
12/1/2035 2,867,250.00 -163,894.38 2,703,355.62
12/1/2036 2,675,625.00 -107,383.22 2,568,241.78
12/1/2037 2,295,125.00 -51,232.00 2,243,893.00
54,944,495.04 -10,228,639.94 44,715,855.10
Subsidy shown is original 35%
Types of Call Features
Extraordinary Redemption Provision (ERP)
Percentage of Par Amount of bonds
Make-Whole Provision
41
Bank Qualified Issues
Bank Qualified
• Banks are large buyers of municipal bonds.
• However, Banks may not deduct the carrying cost (the interest expense incurred to purchase or carry an inventory of securities) of tax-exempt municipal bonds. For banks, this provision has the effect of eliminating the tax-exempt benefit of municipal bonds. An exception is included in the Code that allows banks to deduct 80% of the carrying cost of a "qualified tax-exempt obligation." In order for bonds to be qualified tax-exempt obligations the bonds must be (i) issued by a "qualified small issuer," (ii) issued for public purposes, and (iii) designated as qualified tax-exempt obligations. A "qualified small issuer" is (with respect to bonds issued during any calendar year) an issuer that issues no more than $10 million of tax-exempt bonds during the calendar year. Qualified tax-exempt obligations are commonly referred to as "bank qualified bonds."
• Effectively two types of municipal bonds were created under the Act; bank qualified (sometimes referred to as "BQ") and non-bank qualified. Although banks may purchase non-bank qualified bonds they seldom do so. The rate they would require in order for the investment to be profitable would approach the rate of taxable bonds. As a result, issuers obtain lower rates by selling bonds to investors that realize the tax-exempt benefit. In contrast, banks have a strong appetite for bank qualified bonds that are in limited supply. As a result, bank qualified bonds carry a lower rate than non-bank qualified bonds
45
Bank Qualified - Continued
Any issuer that is planning to issue less than $10 million of tax-exempt securities in a calendar year should consider designating the issue as bank qualified in order to obtain the associated interest cost savings. Issuers requiring more than $10,000,000 may be able to take advantage of bank qualification by issuing two series of bonds. For example, for a $20,000,000 financing, a $10,000,000 issue could be sold this year and one could be sold next year to obtain 2 bank qualified issues. Similarly, for a $25,000,000 financing, $10,000,000 could be sold as bank qualified bonds this year and a non-bank qualified $15,000,000 issue could be sold next year.
46
Bank Qualified Spreads
47
Year BQ NON-BQ1 0.45 0.502 0.54 0.653 0.71 0.834 0.92 1.085 1.32 1.496 1.65 1.877 2.06 2.318 2.35 2.659 2.59 2.93
10 2.76 3.1411 2.88 3.3212 3.00 3.4913 3.12 3.6514 3.25 3.8115 3.34 3.9416 3.44 4.0917 3.54 4.2218 3.64 4.3219 3.74 4.4220 3.84 4.52
Appendix C:Disclaimer and Additional Considerations
49
DisclaimerThis report has been prepared for informational purposes only, and does not constitute an offer, recommendation or solicitation to buy or sell any securities. The content of this report is based upon information generally available to the public from sources believed to be reliable. No representation is made that the information is accurate or complete or that any returns indicated will be achieved. Past performance is not indicative of future results. Price and availability are subject to change without notice. The Huntington Investment Company (HIC), or persons involved in the preparation or issuance of this material, may from time to time, have long or short positions in, and buy or sell, the securities, futures or options identical with those mentioned herein. HIC is a wholly owned subsidiary of Huntington Bancshares Incorporated (HBI) and is registered as a Broker Dealer with the NASD, and a member of SIPC. Investments are Not FDIC Insured, May Lose Value, and are Not Bank Guaranteed.
50
Additional Considerations Huntington does not offer or provide accounting, tax or legal advice to its clients. Each client should seek his or her own, and
Huntington advises you to seek your own, advisors for tax, accounting and legal issues in light of your own circumstances.
Although the statements of fact in this presentation have been obtained from and are based upon sources that Huntington
believes are reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed. All
opinions, estimates and examples constitute Huntington’s judgment as of the date of this presentation and are subject to
change without notice.
This presentation is for informational purposes only and is not intended as an offer or solicitation with respect to the purchase or
sale of any security or derivative product or a recommendation for you to utilize any product. This presentation also does not
attempt to forecast future movements of market prices.
The information in this presentation provides a general overview of each of the topics addressed, and may include general
information regarding certain of the U.S. legal, tax and accounting considerations that may affect the transactions described
herein. The descriptions of such matters are necessarily general, do not address the situation of a particular client and do not
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© 2012 Huntington National Bank.