July 2016

REFI
Structured Credit Offers Solid Cash Flows

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Opinions expressed are those of the author or Semper Funds and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. While the fund is no-load, management and other expenses still apply. References to other funds should not be viewed as an offer of those securities.

Par - Par most commonly refers to bonds, in which case it means the face value, or value at which the bond will be redeemed at maturity.

Cash flow - Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. Cash flow is used to assess the quality of a company's income, that is, how liquid it is, which can indicate whether the company is positioned to remain solvent.

CMBX Index - A group of indexes made up of 25 tranches of commercial mortgage-backed securities (CMBS), each with different credit ratings. The CMBX indexes are the first attempt at letting participants trade risks that closely resemble the current credit health of the commercial mortgage market by investing in credit default swaps, which put specific interest rate spreads on each risk class. The pricing is based on the spreads themselves rather than on a pricing mechanism.

Credit ratings - Assessments of the creditworthiness of a borrower in general terms or with respect to a particular debt or financial obligation.