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CITY OF SANTA ANA STATEMENT OF INVESTMENT POLICY <br />JULY 1, 2016 — JUNE 30, 2017 <br />Page 5 <br />• Mortgage- backed securities — securities created when a mortgage or purchaser of <br />residential real estate mortgages creates a pool of mortgages and markets <br />undivided interests or participation in the pool, including principal only strips; <br />• Repurchase and Reverse Repurchase agreements — agreements involving the <br />borrowing of cash from a financial institution for the purchase of securities in which <br />a financial asset is instead pledged as a collateral for a loan and reverse purchase <br />agreements in which the roles of borrower and lender are reversed. <br />• Securities lending agreements — agreements allowing local agencies to earn <br />incremental income on their investment portfolio by loaning securities in their <br />portfolio to financial services companies for a limited time; <br />AUTHORIZED INVESTMENTS: <br />Santa Ana further restricts permitted investments to those listed below. Within this scope, the <br />City diversifies its investments by maturity dates and types of investments. Concentration limits <br />are indicated for all investment categories except Treasury securities, which are considered the <br />safest investments. <br />A. United States Treasury Bills, Notes, and Bonds, for which the full faith and credit of the <br />United States are pledged for payment of principal and interest. Purchases of this <br />category shall not exceed five years to maturity. There is no percentage limit in this <br />category. <br />B. Obligations issued by a Federal Agency or a United States Government Sponsored <br />Enterprise. Federal Agency Issues include, but are not limited to GNMA (Government <br />National Mortgage Association), FFCB (Federal Farm Credit Bank), FHLB (Federal Home <br />Loan Bank), FHLMC (Federal Home Loan Mortgage Corporation), FNMA (Federal <br />National Mortgage Association), SLMA (Student Loan Mortgage Administration), FHA <br />(Federal Housing Administration), and TVA (Tennessee Valley Authority). Although there <br />is no percentage limitation on these issues, purchases of this category shall not exceed <br />five years to maturity and the "prudent investor" rule shall apply for a single agency name <br />as U.S. Government backing is implied rather than guaranteed. <br />C. Supranational Obligations in United States dollar denominated senior unsecured <br />unsubordinated obligations issued or unconditionally guaranteed by the International <br />Bank for Reconstruction and Development, International Finance Corporation, or Inter - <br />American Development Bank, with a maximum remaining maturity of five years or less, <br />and eligible for purchase or sale within the United States. Investments under this <br />55C -15 <br />