Repurchase Agreement Program
By Financial Strategies Group
Published: 8/24/2006

Repurchase Agreements (Repo’s)
The Baker Group LP in partnership with South Street Securities LLC now provides Repo and Reverse Repo services.
The Baker Group LP
Since 1979, The Baker Group has provided investment portfolio and interest rate risk management services to community banks nationwide. The Baker Group, formerly James Baker & Associates, is registered under the Securities Exchange Act of 1934 as a general securities broker and dealer.  The Baker Group works with more than 650 community banks in more than 30 states and assists clients in managing over $21 billion in securities.  They also provide consulting and investment advisory functions in addition to operating as a broker-dealer and is a member of the NASD.  The Baker Group has offices in Oklahoma City, OK; Austin, TX; Springfield, IL; Indianapolis, IN; and Salt Lake City, UT.
South Street Securities LLC
Formed on March 1, 2001, South Street Securities LLC is a Delaware organized limited liability company that manages for its own account a matched book repurchase and reverse repurchase agreement portfolio.  Underlying, eligible securities collateral will include US Treasury, Agency and Agency MBS.  Ultimately owned by CMET Finance Holdings, Inc. (“CMET”), South Street is a fully registered broker-dealer and a member of the National Association of Securities Dealers Inc. (“NASD”) with a counterparty rating of ‘AAA’ by Standard and Poor’s.  In addition, SSS is a full, Tier I netting member of Fixed Income Clearing Corp., with a maximum program size of $15 billion supported by approximately $145 million in risk-based capital.
Repo Offering to Qualified Customers
	§          The Baker Group is offering to provide a conduit to ‘finance’ US Treasury, Agency, MBS, and other eligible customer collateral positions, thereby providing opportunities for improved returns.  Customers will receive loan proceeds from financings as well as interest & principal payments, which are then collectively available for reinvestment.   §          Baker Group clients participating in the South Street Securities repo offering may, if qualified, also enjoy the ability to Safekeep their remaining unpledged Fed Wire eligible securities with SSS at the Bank of New York.   §          The Baker Group is also offering a cash investment opportunity whereby qualified customers will participate in the US Treasury, Agency, and MBS repo market and thereby earn a preferential return compared to other alternatives.   §          The Baker Group will act as agent and assist in managing customer participation.
Highest Credit Quality
	§          All repo investments are “collateralized fully” with US Treasury, Agency and Mortgage securities. §          Transactions will be executed DVP (delivery versus payment), or through a secure tri-party arrangement with the Bank of New York as trustee and collateral custodian.
Standard Documentation
	§          SSS uses The Bond Market Association’s Master Repurchase Agreement, with related Annexes.
Customer Suitability Criteria
	§          Customers seeking liquidity on current or new securities positions. §          Customers seeking improved returns through liquidity reinvestment and available cash. §          Customers with cash seeking high-grade collateralized loan opportunities. §          Customers capable of managing daily mark-to-market collateral management and margining ability.
Eligible Customer Criteria
	§          Institutional and corporate customers.  Examples include: Banks, Savings Institutions, Trust Companies and other Depositary Institutions. §          Baker Group customers - either existing or new. §          Provide appropriate account opening documentation, including financial statements. §          Trading authorization of appropriate customer contact. §          Standard consent and authorization. §          Executed Bond Market Association, Master Repurchase Agreement with related annexes.
Qualified Cash and Collateral Criteria
	§          Term – Overnight to 3 months. §          US Treasury Bills, Notes and Bonds. §          US Agency issued MBS. §          AAA Private Label Pass-through securities.
Liquid US Treasury and Agency Repo Market
	According to The Bond Market Association’s May 2006 Research Quarterly, “the average daily volume of total outstanding repurchase (repo) and reverse repo agreement contracts totaled $5.67 trillion through the first quarter of 2006, and daily outstanding repo agreements averaged $3.38 trillion outstanding in the first three months of 2006, a 9.7 percent increase over the $3.08 trillion through March 2005.
Repo Principal - Agency Relationship
	Principal - South Street Securities LLC Agent – The Baker Group LP acts on the behalf of our customers
Baker Group Contacts for Additional Information
		Contact Your Baker Registered Representative     Mr. Dan Pilcher Fixed Income Trader The Baker Group LP 1601 Northwest Expressway, 20th Floor Oklahoma City, OK  73118   Mr. Phil Stenseth, CFA Managing Director The Baker Group LP 1601 Northwest Expressway, 20th Floor Oklahoma City, OK  73118		Ph: Em:   Ph: Fx: Em:       Ph: Fx: Em:	(800) 937-2257 repo@gobaker.com   (405) 415-7262 (405) 415-7293 dan@gobaker.com       (405) 415-7280 (405) 415-7293 phil@gobaker.com
South Street Contacts for Additional Information
		Ms. Stephanie Pucci, Trading Principal Mr. Jose Vega, Trading Principal South Street Securities LLC 32 Old Slip, 11th Floor New York, NY  10005		Ph: Fx: Em:	(212) 824-0738 (212) 803-5068 stephanie@sssnyc.com jose.vega@sssnyc.com