AgdaPkt 2017-09-25 Closed and Joint SA PFA

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CITY OF REDWOOD CITY INVESTMENT POLICY draft update: 8/28/17 9 The City may invest in Banker’s Acceptances otherwise known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank. Purchases of bankers’ acceptances shall not exceed 180 days’ maturity from the date of trade settlement,be rated at least A-1, or the equivalent, by a NRSRO, drawn on or accepted by a commercial bank with combined capital and surplus of at least $250 million, whose deposits are insured by the FDIC, and whose senior long- term debt is rated in a rating category of at least “A”, or the equivalent, by a NRSRO at the time of purchase. No more than 2% of the City’s total portfolio shall be invested in bankers’ acceptances of any one issuer, and the aggregate investment in bankers’ acceptances shall not exceed 10% of the City’s total portfolio. M. Repurchase Agreements – Maximum 10% The City may invest in Repurchase Agreements with a final termination date not exceeding 90 days collateralized by U.S. Treasury obligations listed in “A” above and with the maturity of the collateral not exceeding 10 years. For the purpose of this section, the term collateral shall mean purchased securities under the terms of the City’s approved Master Repurchase Agreement. The purchased securities shall have a minimum market value including accrued interest of 102% of the dollar value of the funds borrowed. Collateral shall be held in the City's custodian bank, as safekeeping agent, and the market value of the collateral securities shall be marked-to-the- market daily. Repurchase Agreements shall be entered into only with broker/dealers recognized as a primary dealer by the Federal Reserve Bank of New York, or with financial firms that have a primary dealer within their holding company structure. Approved Repurchase Agreement counterparties shall have a short-term credit rating of at least “A-1”, or the equivalent, and a long-term credit rating of at least :A”, or the equivalent, by a NRSRO. Repurchase agreement counterparties shall execute a City approved Master Repurchase Agreement with the City. The Finance Director/City Treasurer shall maintain a copy of the City's approved Master Repurchase Agreement along with a list of broker/dealers who have executed same. No more than 2% of the City’s total portfolio shall be invested in repurchase agreements with any one counterparty, and the aggregate investment in repurchase agreements shall not exceed 10% of the City’s total portfolio. N. Asset-backed Securities – Maximum 20% A mortgage passthrough security, collateralized mortgage obligation, mortgage-backed or other pay-through bond, equipment lease-backed certificate, consumer receivable passthrough certificate, or consumer receivable-backed bond of a maximum of five years’ maturity. Securities eligible for investment under this subdivision shall be issued by an issuer rated in a rating category of “A” or its equivalent or better for the issuer’s debt as provided by an NRSRO and rated in a rating category of “AA” or its equivalent or better by an NRSRO. Purchase of securities authorized by this subdivision shall not exceed 20% of the City’s surplus moneys that may be invested pursuant to this section. No more than 5% of the City’s portfolio shall be invested in a single issuer. O. Supranational Securities – Maximum 30% United States dollar denominated senior unsecured unsubordinated obligations issued or unconditionally guaranteed by the International Bank for Reconstruction and Development, International Finance Corporation, or Inter-American Development Bank, with a maximum remaining maturity of five years or less, and eligible for purchase and sale within the United States. Investments under this subdivision shall be rated in a rating category of “AA” or its 6.1.B. - Page 35