Winter 2007

Corporate Trust

CONNECTION

inside

U.S. Bank MuniManager Enhances TOB Administration

At U.S. Bank Corporate Trust Services, we recognize the importance of keeping our technology ahead of the curve and being responsive to our customers’ needs. This is why U.S. Bank is pleased to introduce U.S. Bank MuniManager – secure access to your Tender Option Bond (TOB) programs via the Internet.

Real-Time Access to Critical DataU.S. Bank MuniManager is a comprehensive system that handles the administration of all TOB programs. MuniManager provides real-time data 24/7. This versatile tool provides timely cash flow reports, daily position balances, residual investor reports, fee projection reports, fact sheets and more.

“The regulatory environment and municipal marketplace volatility are two factors that have made it more important than ever for clients to have timely online access to their TOB reports,” says Jason Gregory, Vice President & Manager, Tender Option Bonds. “Giving clients real-time information could help them make critical decisions.”

The process is streamlined and secure:• Log in through Trust Portal to access

MuniManager.

2 Economic Outlook 2 Rose Parade 3 Washington Update – 2011 4 Spotlight on the Los Angeles Office

Did You Know?

Corporate Trust Services Platinum Award Winners

The following employees received the 2010 Security Services Platinum Award. The Platinum Award, introduced last year, honors the year’s top performers in U.S. Bank Corporate Trust Services, Fund Services, Institutional Trust & Custody and Trust Technology & Support Services.

Lars Anderson Sheri Ball Paul Bavis Clay Bethune Matt Beu Susan Brown Tom Campbell Nick Caramanico Teresa Caspary Sheri Christopherson John Doherty Bob Dunn Dennis Egan Jeff Emerson Greg Farley Michael Farrell

Steve Finklea Susan Freedman Chris Gehman Grace Gorka Scott Graham Lorraine Grill Kyle Harcourt Ray Haverstock Brand Hosford Dyan Huhta Bob Jones Greg Jordan Ed Kachinski Emily Katt David Keys Dave Massa

continued on page 3

• Select the reports you want and retrieve via secure website. In addition, you can also request delivery of your reports by FTP.

• Choose from multiple viewing formats, including onscreen, Excel or PDF.“MuniManager enhances the customer

experience by creating efficiencies for us and for our clients,” Gregory continues. “In addition to the enhanced reporting capabilities, MuniManager allows us to run various daily internal reconcilements to ensure accuracy of data.”

Help Is HereOnline help is available for each report when you click the “Help” link in the upper-right corner of the screen. Help directs you to individual PDF files containing information specific to the report you are working on. Each PDF contains instructions for entering parameters for running the report, as well as information on interpreting the results.

For questions concerning the reports, contact your Account Manager.

For more information on gaining access, training or demonstration of the system, contact your Account Manager or Jason Gregory at 212-361-6171.

For technical problems accessing the website, call the U.S. Bank Resolution Center at 1-866-252-4360, Monday through Friday from 6:30 a.m. to 7 p.m. Central Time.

spring 2011

In its second estimate, the Bureau of Economic Analysis announced that real gross domestic product (GDP) increased to an annual rate of 2.8 percent in fourth quarter 2010, compared with 2.6 percent in third quarter.* The momentum should continue into the early months of 2011 based on the continuing advance in leading economic indicators and the reduction in payroll taxes for 2011 that will provide an incremental lift to disposable income and consumption spending growth in the early months of the year.

Tempering FactorsWhile activity indicators have accelerated in response to the stimulative efforts of the Federal Reserve (Fed) and tax policy changes, the acceleration in activity is likely to be tempered as the year progresses by rising food and energy prices, ongoing restraint from the state and local government sector, renewed weakness in home prices and expectations for payroll tax rates to normalize in January 2012. Furthermore, with national debt levels likely to be approaching statutory limits by the second quarter of the year, the new House of Representatives will also likely look to achieve cuts in discretionary spending in return for agreeing to lift the debt ceiling. Any reduction in federal spending from planned levels will also work to temper growth in the second half following what should be a reasonably strong pace of growth in the first half of the year.

Employment and Inflation TrendsEmployment growth should improve moderately from the pace of last year and be consistent with a decline in the unemployment rate to about 9 percent by the end of 2011. The sharp decline in the unemployment rate in December was partially a function of a new low in labor force participation, a trend that should reverse with ongoing employment gains.

Economic OutlookBy Keith Hembre, Chief Economist, U.S. Bank

The overall inflation rate should advance with food and energy prices moving higher, but core inflation rates are likely to stabilize around current levels in the coming year. Continued subdued core inflation and unemployment well above longer-term norms suggests that the Fed is likely to maintain its current interest-rate policy through the balance of 2011, although the quantitative easing program seems unlikely to be expanded or extended beyond the June time frame given the improvement in economic indicators and the controversial nature of the program.

Nevertheless, Fed officials have also suggested a relatively high threshold of improvement would be necessary to alter

the program before its completion in June. This should provide support to the financial markets through the program’s duration based on the pattern of prior quantitative easing programs in the United States and elsewhere. But the program will leave the Fed with an extremely large balance sheet, and the future challenge of shrinking it back to normal levels in a non-disruptive manner.

From a fiscal perspective, the Congressional Budget Office has yet to issue official deficit projections as a result of the tax agreement reached last fall, but in all likelihood the federal budget deficit will remain well in excess of $1 trillion over the next two years, adding significantly to the country’s future debt burden and at some point necessitating a significant adjustment in spending and/or tax policies to return fiscal policy to a sustainable level. While the level of debt outstanding is not currently a binding constraint on policy, deficits of the magnitude expected over the next couple of years are diminishing the fiscal flexibility of the federal government. The policies will bring about current growth benefits but result in longer-term costs. The longer-term costs are expected to be paid in subsequent years when the economy is presumably better prepared to absorb them.* Source: Bureau of Economic Analysis, press release,

February 25, 2011, www.bea.gov.

U.S. Bank’s “Home Is Where the Heart Is” float in the Rose Parade 2011.

page 2

Washington Update – 2011By Walter Price, Director of Federal Government Relations, U.S. Bancorp

In the first few days of January, the new 112th Congress returned to Washington for swearing-in ceremonies and to work through organizational issues to prepare for the upcoming legislative session.

In the U.S. Senate, following the November election, the Democrats remained in the majority, although by a narrower margin than in the 111th Congress – 51 Democrats, two Independents who generally caucus with the Democrats and 47 Republicans.

At the end of January, the decisions were finalized regarding committee leadership and composition. Sen. Tim Johnson (D-South Dakota) became the new Chairman of the Senate Banking Committee, following Sen. Chris Dodd (D-Connecticut), who retired at the close of the last Congress. Sen. Richard Shelby (R-Alabama) is the senior Republican on the Committee.

Several new members were named to the Senate Banking Committee including: Sen. Kay Hagan (D-North Carolina), Sen. Jerry Moran (R-Kansas), Sen. Pat Toomey (R-Pennsylvania), Sen. Roger Wicker (R-Mississippi) and Sen. Mark Kirk (R-Illinois).

Shift in the HouseIn the U.S. House of Representatives, there was a significant shift – as the Republicans have taken over the majority – and now have a 239-189 edge over the Democrats in the lower chamber. In the first week of January, the new members were sworn in and formally elected John Boehner (R-Ohio) as the Speaker of the House.

In the House Committee on Financial Services, Rep. Spencer Bachus (R-Alabama) was named as the Chairman of the Committee, taking over from Rep. Barney Frank (D-Massachusetts), who will now be the senior Democrat.

It is anticipated that the House Financial Services Committee will begin to ramp up its activity as hearings are scheduled on a number of policy issues of importance to the financial services industry, including housing finance reform (the role of Fannie and Freddie), oversight of a number of the rules and regulations that were included as part of the Dodd-Frank regulatory reform legislation, and a closer examination of the debit card interchange legislation that was passed as part of Dodd-Frank.

At this point, we anticipate a series of hearings taking a section by section, issue by issue approach to Dodd-Frank. Committee leaders plan to bring regulators up to Capitol Hill for updates and testimony on the status of the rule-writing process.

Of primary importance to U.S. Bank will be any potential legislative action involving the Federal Reserve’s proposed rules regulating debit interchange fees (the Durbin Amendment). These rules require the federal government to set prices that banks and credit unions can charge merchants for debit card services. However, the rule does not allow banks like U.S. Bank to consider the value and cost of providing banking services. This new rule has significant implications for U.S. Bank and the financial services industry as a whole.

The banking industry is urging Congress to take the following actions regarding interchange:• Delay the effective date of the Federal

Reserve’s rulemaking for two years;• Hold hearings on the Durbin Amendment

that includes economists, regulators and business analysts focusing upon the effects of price fixing;

• Require a governmental study to review and analyze the impact of the Durbin Amendment; and

• Take appropriate action based upon hearings, research and the governmental study and review.

The Financial Institutions Subcommittee in the House was expected to have a hearing on this topic in mid-February – we also anticipate the Senate Banking Committee to look closer at the Fed’s rule on interchange later this spring.

In March and April (as we did in 2010), two groups of U.S. Bank senior leaders will be travelling to Washington to meet with their respective congressional delegations to advocate on public policy issues – such as interchange – of importance to U.S. Bank.

Tami Mawn David Morrison Barb Nastro Jill Olson Rich Ostby Paula Oswald Nancy Raabe Mary Reyes-Ambriz Diane Reynolds Brad Scarbrough

Dan Sheff Sheila Soares Scott Strodthoff Linda Verstuyft Becky Warren Ian Watson Donna Williams Cindy Woodward Mike Zak Tom Zrust

Corporate Trust Services Platinum Award Winners

continued from front

page 3

In March and April, two groups of U.S. Bank senior leaders will be travelling to Washington to meet with their respective congressional delegations.

60 Livingston Avenue EP-MN-WS3WSt. Paul, MN 55107

The articles and information included in this newsletter are for your information and are not intended as legal, accounting or tax advice. U.S. Bank and its representatives do not provide legal, accounting and/or tax advice. Clients are encouraged to contact their legal, accounting and/or tax advisor regarding their particular situation. While the information is intended to be accurate, neither U.S. Bank Corporate Trust Services nor the publisher accepts responsibility for relying on the information provided. Images may be from one or more of these sources: ©Thinkstock, ©iStock, ©Fotolia. ©2011 U.S. Bank Corporate Trust Services. Member FDIC.

Comments and suggestions for the newsletter are welcome and should be forwarded to Ashley Beukelman, Corporate Trust Connection, U.S. Bank Corporate Trust Services, (651) 495-3941 (phone) or marketing.corporatetrust@usbank.com (e-mail). For more information, visit our website at usbank.com/corporatetrust.

Spotlight on the Los Angeles OfficeFrom the iconic “Hollywood” sign to the celebrities honored on the Walk of Fame, Los Angeles is all about the stars. U.S. Bank Corporate Trust Services has its own star performers – the employees at its Los Angeles office – who shine at providing exemplary service to their customers.

Major Players in a Large MarketThe Los Angeles office is one of the largest U.S. Bank Corporate Trust Services offices, with 51 employees averaging more than 20 years of experience.

“We offer a full range of corporate trust products and services with an emphasis on municipal bond transactions and corporate escrow transactions, particularly merger and acquisition indemnity escrows,” says Teresa Caspary, West Region Manager. “U.S. Bank is No. 1 in municipal market share in the state and has been for more than 10 years. Since California is the nation’s largest issuer of municipal bonds, our office has closed just about every type of municipal financing that has gone to market.”

The office counts among its customers cities, utilities, water districts, school districts, redevelopment agencies,

The star performers of the U.S. Bank Corporate Trust Services Los Angeles office.

community facility districts, housing agencies, and higher education and health care institutions.

“Our customers are so loyal because of the exceptional customer service they receive from our highly seasoned and professional staff,” Caspary says. “We are always trying to improve the customer experience and have earned their trust and loyalty. We work in a very competitive

market, and that means each staff member needs to be at the top of his or her game.”

If you’re in L.A., stop by the U.S. Bank Corporate Trust Services office in the U.S. Bank Tower to say hello. It’s easy to spot – it’s the tallest building west of the Mississippi. If you have questions about our products and services, please contact your Account Manager.

NOT A DEPOSIT NOT FDIC INSURED NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY

MAY LOSE VALUE NOT GUARANTEED BY THE BANK

INVESTMENT PRODUCTS ARE: