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6.1.D. - Page 74 <br />Notes to the Basic Financial Statements <br />For the fiscal year ended June 30, 2016 <br />NOTE 2 — CASH AND INVESTMENTS (CONTINUED) <br />Poor's or P-1 by Moody's Investor's Service, and corporate bonds to those rated A or better by Standard <br />and Poor's or Moody's Investor's Service. <br />Under the provisions of the City's investment policy, and in accordance with California Government Code, <br />the following investments are authorized: <br />The City's investments are rated by the nationally recognized statistical rating organizations as follows: <br />Moody's <br />Maximum <br />Maximum <br />U.S. Agencies, Securities, and Corporate Notes: <br />Maximum <br />Percentage of <br />Investment in <br />Authorized Investment Tvoe <br />Maturitv <br />Portfolio <br />One Issuer <br />United States Treasury Obligations <br />5 years <br />No limit <br />No limit <br />Federal Agency or Government <br />Aaa <br />AA+ <br />AAA <br />Sponsored Enterprises (GSEs) <br />N/A <br />70% <br />35% <br />Local Agency Investment Fund <br />N/A <br />No limit <br />$65 Million <br />San Mateo County Pool <br />N/A <br />No limit <br />$50 Million <br />State and Local Agency Bonds <br />N/A <br />20% <br />2% <br />Money Market and Mutual Funds <br />N/A <br />20% <br />5% <br />U.S. Medium -Term Notes <br />3 years <br />20% <br />2% <br />Certificates of Deposit <br />3 years <br />10% <br />2% <br />Prime Commercial Paper <br />270 days <br />10% <br />2% <br />Bankers' Acceptances <br />180 days <br />10% <br />2% <br />Repurchase Agreements <br />90 days <br />10% <br />No limit <br />The City's investments are rated by the nationally recognized statistical rating organizations as follows: <br />Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the failure of <br />the counter party, the City will not be able to recover the value of its investments or collateral securities <br />that are in the possession of an outside party. All securities, with the exception of the County Pool and <br />LAIF, are held by third -party custodians (Union Bank of California Trust Division, U.S. Bank and <br />47 <br />Moody's <br />S&P <br />Fitch <br />U.S. Agencies, Securities, and Corporate Notes: <br />Federal Home Loan Bank <br />Aaa <br />AA+ <br />Federal National Mortgage Association <br />Aaa <br />AA+ <br />AAA <br />Federal Home Loan Mortgage Corporation <br />Aaa <br />AA+ <br />AAA <br />Federal Farm Credit <br />Aaa <br />AA+ <br />AAA <br />U.S. Treasury Securities <br />Aaa <br />AA+ <br />AAA <br />External Investment Pools: <br />San Mateo County Investment Fund <br />Not Rated <br />AAAf/S1 <br />Not Rated <br />California Local Agency Investment Fund <br />Not Rated <br />Not Rated <br />Not Rated <br />Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the failure of <br />the counter party, the City will not be able to recover the value of its investments or collateral securities <br />that are in the possession of an outside party. All securities, with the exception of the County Pool and <br />LAIF, are held by third -party custodians (Union Bank of California Trust Division, U.S. Bank and <br />47 <br />