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San Leandro Investment Policy Statement Page 5 of 13 U.S. Treasury Instruments include bills, notes and bonds or certificates of indebtedness for which the full faith and credit of the United States is pledged for the payment of principal and interest. There are no portfolio limitations on the amount. The State of California Local Agency Investment Fund (LAIF) (Government Code Section 16429.1). Local agencies may invest in LAIF, a pooled investment fund managed by the State Treasurer's Office. The City may deposit up to the maximum program limit in each City /Agency account. The current maximum amount of money that an agency may invest in LAIF is $50 million. Banker's Acceptances allows for 40% of the City's portfolio to be invested in Banker's Acceptances. These are known as bills of exchange or time drafts that are drawn on and accepted by a commercial bank, with maturities no longer than 180 days. No more than 30% of the entire portfolio may be invested in the Banker's acceptances of a single bank. The bank must have an "A" or highest money market rating from a nationally recognized statistical- rating organization (NRSO), such as Standard & Poor's or Moody's. Commercial Paper is a short -term, unsecured promissory note issued by financial and non - financial companies to raise short-term cash. Up to 25% of the City's portfolio may be invested in commercial paper the highest quality ranking or of the highest rating by a nationally recognized statistical- rating organization (NRSO). The issuer must be a domestic corporation having assets in excess of $500 million and a minimum quality rating of A -1 from Standard and Poor's and P -1 from Moody's for its debt other than commercial paper. Maturities of individual commercial paper securities cannot exceed 270 days and the city may purchase no more than 10% of the outstanding commercial paper of any single issuer. No more than 25% of the portfolio can be invested in commercial paper. Medium -Term Corporate Notes are corporate bonds and notes of industrial companies, banks, bank holding companies, insurance companies, thrifts and finance companies with a maximum maturity of five years. Issuers must be corporations organized and operating in the United States or by depository institutions licensed by the United States, any state or operating within the United States. Securities issued by corporations must be rated "AA" or better by an NRSO. Purchases may not exceed 30% of the agency portfolio. Repurchase Agreements are agreements between the local agency and seller for the local agency to purchase government securities to be resold back to the seller at a specific date and for a specific amount. The legal maximum maturity on these investments is 360 days; however, repurchase agreements are generally short-term investments. Investments in Repurchase Agreements must be collateralized, with collateral limited to Treasury and Agency securities at 102% of market value of principal and accrued interest; and these investments must be supported by a master repurchase agreement with the bank or dealer. Holdings cannot exceed 20% of the agency portfolio. Reverse Repurchase Agreements are a sale of securities by the local agency with a simultaneous agreement for the local agency to repurchase the securities on or before a specified date. Reverse purchase agreements must comply with statutory requirements and are fully collateralized by delivery to a third -party custodian. The maximum term for