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CITY OF REDWOOD CITY <br />INVESTMENT POLICY <br /> Last update: 6/22/2016 7 <br />not limited to, over collateralization, letters of credit or surety bond; and (3) have commercial <br />paper that is rated at least A-1, or the equivalent, by a NRSRO. <br /> <br />No more than 2% of the City’s total portfolio shall be invested in the commercial paper of any one <br />issuer, and the aggregate investment in commercial paper shall not exceed 10% of the City’s total <br />portfolio. <br /> <br />J. Bankers’ Acceptances – Maximum of 10% <br />The City may invest in Banker’s Acceptances with a maturity not exceeding 180 days from the <br />date of trade settlement, rated at least A-1, or the equivalent, by a NRSRO, drawn on or accepted <br />by a commercial bank with combined capital and surplus of at least $250 million, whose deposits <br />are insured by the FDIC, and whose senior long-term debt is rated at least A, or the equivalent, by <br />a NRSRO at the time of purchase. No more than 2% of the City’s total portfolio shall be invested <br />in bankers’ acceptances of any one issuer, and the aggregate investment in bankers’ acceptances <br />shall not exceed 10% of the City’s total portfolio. <br /> <br />K. Repurchase Agreements – Maximum 10% <br />The City may invest in Repurchase Agreements with a final termination date not exceeding 90 <br />days collateralized by U.S. Treasury obligations listed in A above and with the maturity of the <br />collateral not exceeding 10 years. For the purpose of this section, the term collateral shall mean <br />purchased securities under the terms of the City’s approved Master Repurchase Agreement. The <br />purchased securities shall have a minimum market value including accrued interest of 102% of <br />the dollar value of the funds borrowed. Collateral shall be held in the City's custodian bank, as <br />safekeeping agent, and the market value of the collateral securities shall be marked-to-the- <br />market daily. <br /> <br />Repurchase Agreements shall be entered into only with broker/dealers recognized as a primary <br />dealer by the Federal Reserve Bank of New York, or with financial firms that have a primary dealer <br />within their holding company structure. Approved Repurchase Agreement counterparties shall <br />have a short-term credit rating of at least A-1, or the equivalent, and a long-term credit rating of <br />at least A, or the equivalent, by a NRSRO. Repurchase agreement counterparties shall execute a <br />City approved Master Repurchase Agreement with the City. The Finance Director/City Treasurer <br />shall maintain a copy of the City's approved Master Repurchase Agreement along with a list of <br />broker/dealers who have executed same. No more than 2% of the City’s total portfolio shall be <br />invested in repurchase agreements with any one counterparty, and the aggregate investment in <br />repurchase agreements shall not exceed 10% of the City’s total portfolio. <br /> <br />L. Prohibited Investment Transactions and Derivatives: <br />1. The Government Code specifically prohibits certain types of investment instruments <br />for municipalities. In addition to those prohibitions, investments not listed under Paragraph IX <br />are not permitted, including, without limitation, the following investments: <br />a. Reverse Repurchase Agreements <br />b. Financial futures or financial option contracts <br />c. Bank Time Deposits <br />d. Security lending <br /> <br />2. Additionally the City shall not invest in any security that could result in zero interest accrual <br />if held to maturity. <br />6.1.I. - Page 20