Tag Archives: BMO Capital Markets

Credit Unions Big Boose to Small Business - AZ Business Magazine September/October 2011

BMO Harris Bank boosts credit to AZ business owners

BMO Harris Bank is making an additional $2 billion in credit available to businesses in Arizona over the next three years.

“We’re here to help, making more of our balance sheet available to businesses to support growth opportunities and help create new jobs,’ said Tim Bruckner, Arizona Commercial Banking Manager, BMO Harris Bank.

“We have heard from our customers who say they are upbeat on the economy. A BMO Harris report shows that more than 60 percent of Arizona business owners and CEOs plan to make at least one investment in their business this year,” added Mr. Bruckner.

“The Arizona economy is poised to accelerate in 2015, supported by an improved labor market and a recovery in the housing market,” said Michael Gregory, Head of U.S. Economics, BMO Capital Markets. “Real GDP is expected to grow 3.4 percent, slightly higher than the national average and improved from the 2.5 percent expected in 2014. 

Mr. Gregory noted that improved business confidence should maintain solid growth in investment and hiring. Gains are expected in job growth, coming from the service sector – led by professional and business services, education and health and tourism. “The state is on track to add about 55,000 new jobs in 2015.”

Deloitte Report Reveals Mid-Market Companies Expect U.S. Economic Growth

BMO: Arizona economy will accelerate in 2015

Arizona’s economy should pick up in 2015, with expected GDP growth of 3.5 percent, just ahead of the national average and an improvement from the expected 2.5 percent in 2014, according to the bi-annual U.S. State Monitor Report from BMO Economics. Steady population growth and job growth in the high-tech market will also help lead the state’s economic acceleration.

Arizona is again outperforming when it comes to job-growth. Nonfarm payrolls rose 2.5 percent year over year in the fourth quarter. The service sector, led by professional and business services, education, health and tourism, has been responsible for the gains.

Robert Kavcic, Senior Economist, BMO Capital Markets, noted that better momentum could be on the horizon for manufacturing and construction employment. The unemployment rate continues its negative trend, 6.7 percent in December compared to 7.6 percent a year earlier. On the flip side, there is an underlying softness in the labor market as evidenced by average weekly earnings which were down 2.8 percent year over year in the fourth quarter.

”We continue to see increased activity in several sectors, including healthcare, trade and distribution,” said Tim Bruckner, Managing Director, Commercial Banking, Arizona, BMO Harris Bank. “We also know that the majority of Arizona businesses are planning to invest. We’re here to help support business owners as they lead Arizona’s economic recovery.”

The housing headwinds experienced in 2014 appear to be fading slightly with a decrease in rates and mortgage lending conditions somewhat softening. The S&P Case-Schiller Index reported that Phoenix prices are up year-over-year by 2 percent, but that is still a giant downward shift from the 20 percent-plus growth experienced early in the recovery. On the positive side, the vacancy rate is now back down to match the fifty-state average.

Stronger population growth is helping to drive an improved economy, which is steady at a 1.3 percent year-over-year clip. Overall interstate migration remains depressed, somewhat due to the impact the housing market’s decline has had on mobility.

“Population inflows for Arizona, while still positive, would be stronger were it not for the decline in the housing market,” said Mr. Kavcic.

To view a full copy of the report, visit www.bmocm.com/economics.


84% of Phoenix buyers settle for ‘less than perfect’ home

According to a survey released by BMO Harris Bank, Arizona house hunters visit an average of 11 homes before they buy, with the majority (84 percent) of buyers spending up to six months searching the market.

The report, conducted by Pollara, also revealed:
• Slightly less than half (48 percent) of home buyers currently on the market believe they will find their dream home in their price range, while 52 percent say it’s impossible
• 77 percent are willing to settle for a less than perfect home. In Metro Phoenix, that numbers rises to 84 percent
• Most (79 percent) of home buyers say they’ll know immediately when they’ve found their ideal house

“Typically the purchase of a home is one of the most important financial commitments we make,” said Tony Cesarano, Arizona Mortgage Manager, BMO Harris Bank. “For many people it is also a long-term commitment and is therefore, worth taking your time to find a home that both ‘feels right’ and fits within your budget.”

While overall stress levels about the home buying process are moderate, Arizonans still have some concerns.  Their biggest worry is that they will find something wrong with the house once they move in (73 percent). In addition, 69 percent fear that housing prices will drop after they move in, and 57 percent fear the possibility of not being able to afford their mortgage.

“The housing market lost some of its forward momentum earlier this year, in the wake of higher mortgage rates and as the availability of credit was constrained by uncertainty over new regulations. The latter, as anticipated, proved to be temporary,” said Michael Gregory, Head U.S. Economics, BMO Capital Markets.

“In the third quarter of this year, mortgage lending standards were being relaxed more prolifically than at any other point since the Federal Reserve’s new survey began in 2007,” added Mr. Gregory. “Meanwhile, 30-year fixed mortgage rates have dipped back below the 4 percent level in recent weeks, for the first time since the spring of 2013. Both of these developments point to a pickup in housing market activity, in terms of turnover and homes — yes, even ‘dream homes’— available for sale.”

At the national level, the survey found:
• 77 percent of home buyers thought they will know their dream home as soon as they see it
• First time home buyers are more likely to feel stressed, but they are also more likely to be excited (47 percent), hopeful (43 percent) and happy (37 percent)
• 42 percent of homeowners spend 4 or more months actively looking at homes before buying
• 33 percent of homeowners visited 10 or more homes before buying

“Working with a qualified mortgage professional can help alleviate some of the stress connected with buying a home. I’d recommend getting pre-qualified so you will know exactly how much you can afford when you find the perfect home,” Cesarano added.

For more trends, tips and tools to help you plan for your financial future, including buying a home, click here.


Arizona economy rising, report shows

Phoenix and the broader Arizona economy are expanding again after an extremely difficult recession, although growth will be more modest than the boom times of a decade ago, according to a report released today by BMO Economics.

The labor market is a bright spot, with the city remaining consistent in its job growth performance.  “The city has been a consistent job growth outperformer so far during the recovery and, after a soft patch earlier in the year, growth has accelerated again,” said Robert Kavcic, Senior Economist, BMO Capital Markets.  “If the recent growth clip persists – and we believe that it should – the Phoenix economy should be able to add roughly 85,000 new jobs by the end of 2016.”

“It’s encouraging that the economic health of Arizona, and Phoenix in particular, continues to improve,” said Steve Zandpour, newly-appointed Arizona Regional President, BMO Harris Bank. “It’s nice to see construction activity again. Projects that had been on hold for quite a while have broken ground, adding another positive stimulus to the community.”

The Valley’s economic diversity will help it continue to recover at a solid pace.  “Phoenix boasts a diverse economy with exposure to a wide range of industries in high-tech manufacturing, construction, finance and professional services,” stated Kavcic. “Of the 250,000 jobs lost during the recession, nearly three-quarters of them have recovered.”

The finance and insurance sector employs more than 125,000 people – a record high, in the city.  The fast-growing biotechnology sector also has a strong presence in the region, with two new structures recently approved at the Phoenix Biomedical Campus, including a $136 million investment by the University of Arizona.

On the housing side, the foreclosure rate across Arizona has tumbled to below 1 percent – now among the lowest in America – while higher home prices have reduced the share of mortgages in a negative equity position.  “Fundamentals support a continued, albeit more modest, housing market recovery in the city,” said Mr. Kavcic.

To view a full copy of the report, visit www.bmocm.com/economics.

ade statewide data system

IO Raises $260 Million in Financing

IO, the global leader in software-defined data centers, today announced the closing of a new $260,000,000 multi-year credit facility led by Wells Fargo. IO’s existing bank group, consisting of Wells Fargo and Mutual Bank of Omaha, has been expanded to include Bank of America, Bank of Montreal, JPMorgan Chase Bank, Royal Bank of Canada, National Bank of Arizona, Goldman Sachs Lending Partners and Morgan Stanley Bank.

“We are pleased to have led the charge in this financing for IO, and we look forward to IO’s continued success and growth,” said Frank Pizzo, managing director and head of the Loan Syndications and High Yield Debt Capital Markets group at Wells Fargo Securities.

“This new credit facility will help IO to continue to design, engineer and deliver the world’s leading software-defined data center technology,” said George D. Slessman, IO CEO and Product Architect. “Our IO Intelligent Control® platform solves the data center needs of our customers in an efficient, scalable and cost-effective manner. We are pleased to continue our relationship with Wells Fargo and Mutual of Omaha, and welcome the new members of the bank group to IO.”

Wells Fargo Securities, BMO Capital Markets, J.P. Morgan Securities, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBC Capital Markets served as joint lead arrangers.