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CITY OF SAN LEANDRO
<br />NOTES TO BASIC FINANCIAL STATEMENTS
<br />For The Year Ended June 30, 2021
<br />NOTE 2 – CASH AND INVESTMENTS (Continued)
<br />Asset-backed Securities, the bulk of which are mortgage-backed securities, entitle their
<br />purchasers to receive a share of the cash flows from a pool of assets such as principal and interest
<br />repayments from a pool of mortgages (such as CMOs) or credit card receivables.
<br />Concentration of Credit Risk
<br />The City’s Policy states that the investment portfolio shall be designed with the objective of attaining a
<br />rate of return throughout budgetary and economic cycles, commensurate with the City’s investment risk
<br />constraints and the cash flow characteristic of the portfolio. Purchases of mutual funds must not exceed
<br />20% of the value of the portfolio. Investments in U.S. agencies exceed 5% of total portfolio, and Federal
<br />agency investments exhibited below exceeded 5% percent or more of the total investments in any one
<br />issuer:
<br />US Government Agency Securities Amount Invested
<br />Percentage of
<br />Investments
<br />Federal agency securities:
<br />Federal Home Loan Mortgage Corporation (FHLMC) 14,260,930$ 19.52%
<br />Federal Home Loan Bank (FHLB) 13,442,875 18.40%
<br />Federal National Mortgage Association (FNMA) 8,348,048 11.43%
<br />Fannie Mae 6,355,349 8.70%
<br />Federal Farm Credit Bank (FFCB)1,992,360 2.73%
<br />Total 44,399,562$ 60.77%
<br />Disclosures Relating to Credit Risk
<br />Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder
<br />of the investment. This is measured by the assignment of a rating by a nationally recognized statistical
<br />rating organization. Presented below is the minimum rating required by (where applicable) the California
<br />Government Code, the Entity’s investment policy, or debt agreements, and the actual rating as of year-end
<br />for each investment type.
<br />The City’s policy requires that mutual funds must have the highest rating provided by not less than two of
<br />the three largest nationally recognized rating organizations.
<br /> Fair
<br />Minimum
<br />Legal Exempt From
<br />Investment Type Value Rating Disclosure Not Rated A-1 AAA AA+
<br />Federal Agency Securities 44,399,562$ N/A -$ -$ -$ -$ 44,399,562$
<br />Money Market Fund 88,694 N/A 88,694
<br />U.S. Treasury Notes 37,668,393 N/A 37,668,393
<br />Local Agency Investment Fund 74,557,857 N/A 74,557,857
<br />Medium-Term Notes 20,593,467 A 505,905 1,439,902
<br />Asset Backed Securities 1,055,080 AAA 564,277 490,803
<br />Supranationals 2,816,956 AA 808,496 2,008,460
<br />Commercial Paper 4,197,870 A-1+4,197,870
<br />Held by fiscal agent:
<br /> U.S. Treasury Money Market 8,168,821 A 8,168,821
<br />Total 193,546,700$ 37,668,393$ 76,019,324$ 4,197,870$ 11,173,989$ 45,839,464$
<br /> AA AA- A+ A A-
<br />Medium-Term Notes 1,682,068$ 2,114,340$ 1,921,295$ 6,161,549$ 6,768,408$
<br />55316
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