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San Leandro Investment Policy Statement Page 6 of 14 <br /> <br /> <br />Medium-Term Corporate Notes are corporate bonds and notes of industrial companies, <br />banks, bank holding companies, insurance companies, thrifts and finance companies with <br />a maximum maturity of five years. Issuers must be corporations organized and operating in <br />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 “A” or better by an NRSO. Purchases may not exceed 30% of the City’s portfolio. <br /> <br />Repurchase Agreements are agreements between the City and seller for the City to <br />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 <br />Agreements must be collateralized, with collateral limited to Treasury and Agency securities <br />at 102% of market value of principal and accrued interest; and these investments must be <br />supported by a master repurchase agreement with the bank or dealer. Holdings cannot exceed 20% of the City’s portfolio. <br /> <br />Reverse Repurchase Agreements are a sale of securities by the local agency with a <br />simultaneous agreement for the local agency to repurchase the securities on or before a <br />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 reverse repurchase agreements is 92 days. The proceeds of reverse repurchase transactions must <br />be invested in securities having maturities shorter than or equal to the term of the underlying <br />agreement. Reverse repurchase agreements cannot exceed 20% of the City’s portfolio. <br /> Passbook Savings Accounts or Time Certificates of Deposit are fixed term, non- negotiable investments which are required to be collateralized 110% by eligible pooled <br />U.S. Government Securities. Promissory notes secured by first mortgages or trust deeds <br />used as collateral require a market value of at least 150% of the amount deposited. There <br />are no portfolio limits. Mutual Funds and Money Market Mutual Funds that are registered with the <br />Securities and Exchange Commission under the Investment Company Act of 1940, <br />provided that: <br /> a. MUTUAL FUNDS that invest in the securities and obligations as authorized under California Government Code, Section 53601 (a) to (k) and (m) to (q) <br />inclusive and that meet either of the following criteria: <br />1. Attained the highest ranking or the highest letter and numerical rating <br />provided by not less than two (2) NRSROs; or 2. Have retained an investment adviser registered or exempt from <br />registration with the Securities and Exchange Commission with not less <br />than five years’ experience investing in the securities and obligations <br />authorized by California Government Code, Section 53601 and with <br />assets under management in excess of $500 million. 3. No more than 10% of the total portfolio may be invested in shares of any <br />one mutual fund. <br /> <br />171