Cavanal Hill Expands Municipal Credit Research Team

TULSA, Okla.--(EON: Enhanced Online News)--Cavanal Hill Investment Management, Inc. (Cavanal Hill) has hired a former Moody’s Investors Service, Inc. (Moody’s) manager in a move to expand municipal credit research and analysis on behalf of its clients.

“As a result, a thorough assessment of a municipal bond offering requires detailed research and expertise.”

Brian Henderson, president of Cavanal Hill, said Douglas Benton will expand the firm’s ability to evaluate municipal securities owned by clients of Cavanal Hill, its parent company, Bank of Oklahoma, N.A. (Bank of Oklahoma), as well as other banking affiliates owned by BOK Financial (BOKF). Benton also will provide research and analysis for BOK Financial’s broker-dealer affiliate, BOSC, Inc. (BOSC).

Prior to joining Cavanal Hill, Benton served as the leader of Moody’s southwest regional municipal bond ratings team. He headed a team of municipal bond analysts who were responsible for rating the revenue and tax-supported debt of Moody’s-rated local governments in Oklahoma, Texas, Arkansas, New Mexico, Kentucky, Louisiana and Mississippi. Benton also served as a lead analyst on Moody’s coverage of several of the region’s major municipalities.

He began his career in commercial banking and has served as a bankruptcy and litigation consultant for a nationally recognized accounting firm. Benton holds an MBA in Accounting from Rice University, as well as a bachelor’s degree in Finance from Baylor. He is a CPA, and a member of the American Institute of CPAs (AICPA) and a member of the Texas Society of CPAs.

Rich Williams, Cavanal Hill Vice President and leader of the tax-exempt fixed income team, said several factors led to the expansion of the firm’s municipal credit research team. Key drivers were the shakeup in the bond insurance industry during the 2008 market crisis, as well as increasing concerns about the creditworthiness of some municipalities.

“In the past, high net worth investors have often managed their own bond portfolios,” Williams said. “Just within the last two years, the risks have increased significantly in this area. Investors need a good partner with the right municipal credit resources, whether it’s a broker or an investment manager,” he said. Williams referred to the credit crisis of 2008 when some bond insurers lost their credit ratings, resulting in many municipal bonds which they insured being downgraded to non-rated status.

“We’re also seeing increasing financial distress with some municipalities as they struggle to service their existing debt burden, and grapple with future health benefit and pension liabilities,” Williams said. He noted that municipalities are not subject to the same financial disclosure requirements as public companies. “As a result, a thorough assessment of a municipal bond offering requires detailed research and expertise.”

Increasing tax rates historically have driven investors to seek out tax free investments, Williams said, making it likely that the demand for municipal bonds will remain constant or grow as tax rates for the wealthiest individuals increase. Income from municipal bonds generally is tax exempt, and many states also provide a tax exemption for bonds issued within their own state.

Williams said Benton will provide key insight not only for current client holdings of Cavanal Hill, Bank of Oklahoma, and BOSC, but will also lead a team to prepare in-depth analysis and recommendations for future purchases.

Henderson said the addition of Benton and the expansion of the tax-exempt fixed income team will position the firm to provide even greater resources to clients.

“The firm has had a long history of performing well in the taxable and tax-exempt fixed income space, and we believe we have one of the best equity management teams in the country. It was time to expand our capabilities in this area, which is becoming increasingly complex yet even more important to investors.”

The team also will assist the BOSC investment banking unit, one of the largest underwriters of municipal bonds in Oklahoma and Texas, in providing bond underwriting, financial advisory services, debt policies and placement to its clients.

Founded in 1991, Cavanal Hill Investment Management, Inc. is an SEC-registered investment adviser and a wholly-owned subsidiary of Bank of Oklahoma, N.A. The firm manages more than $4 billion in assets for institutions and high net worth individuals invested in separately managed accounts as well as mutual funds. The firm serves as the investment adviser to Cavanal Hill Funds, which include four fixed income funds, two equity funds and three money market funds. Cavanal Hill has 37 employees.

DISCLOSURES

Cavanal Hill Investment Management, Inc. (Cavanal Hill) is an SEC registered investment adviser and a wholly-owned subsidiary of Bank of Oklahoma, N.A., a bank subsidiary of BOK Financial Corporation, a financial holding company. Past performance does not guarantee future results. Investments are subject to risks, including the possible loss of the principal amount invested. This material does not constitute the recommendation of Cavanal Hill to meet the investment needs of any individual client. It does not take into account any specific investment objectives, financial situations, or particular needs of any specific person who may receive this material. Investors should seek financial advice regarding the appropriateness of investing in any securities, other investment or investment strategies, including those discussed herein and should understand that statements regarding future prospects may not be realized. The information provided herein is not an offer to sell or a solicitation of an offer to buy any securities in any jurisdiction. Investors should note that income from such securities or other investments, if any, may fluctuate and that price or value of such securities and investments may rise or fall. Cavanal Hill provides investment advice, administration and other services for the Funds and receives a fee for providing such services as fully described in the prospectus. Bank of Oklahoma and its affiliates Bank of Arkansas, N.A., Bank of Albuquerque, N.A., Bank of Texas, N.A., Southwest Trust Company, N.A., Bank of Arizona, N.A., Bank of Kansas City, N.A., and Colorado State Bank and Trust, N.A. offer investment management and administrative services nationally and administer more than $30 billion in assets for numerous clients, including foundations and endowments, and high-net-worth individuals. The funds are distributed by BOSC, Inc., a registered Broker/Dealer, member FINRA/SIPC, and an affiliate of Bank of Oklahoma, N.A., and Cavanal Hill Investment Management, Inc.

An investment in the Cavanal Hill Funds is not a deposit or an obligation of Bank of Oklahoma, N.A., its affiliates, or any bank and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other governmental agency. Investors should carefully consider the investment objectives, risks, charges, and expenses of a fund before investing. For a prospectus containing this and other important information for any Cavanal Hill Fund product, call your financial representative, call the Cavanal Hill Funds at 1-800-762-7085 or go to www.cavanalhillfunds.com. The Cavanal Hill Funds are distributed by BOSC, Inc., member of FINRA and SIPC, and a subsidiary of BOK Financial Corp. Fund portfolio holdings are subject to change and do not represent any type of recommendation.

MUTUAL FUNDS AND OTHER INVESTMENTS: NOT FDIC INSURED

MAY LOSE VALUE * NO BANK GUARANTEE