HomeMy WebLinkAbout0173.093"
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F.bruary 18, 1993
TH[ HONORABLE C lTV CDUNe I L
Palo Alto, Califcrnia
INYESTM<HT ACTiYITY REPORT FOR JAHUARY 1993
Members of th~ Council:
This is an informatior.al report and no Council action is necessary.
INTEREST INCOME:
lnterest incerne on an accrual basis for the month of January was 5863,975 and for
the first seven months of 1992-93 totaled $6.0 ml'lion, 63 percent of the annual
target of $9.65 mlll i01L On a cash basis, receipts totalled $680,082 for
January, anci $5.7 mill ion year to date. The effective annual rate of retlJrn on
an accr~il basis is 6.72 percent for the current fiscal year.
CURRENT PORTFOLIO
T1'I:2 par vilue of the Cit:(s portfolio 1S $164 miiTion, which consists cf Si14
million, or 70 perrent, maturing ... ithin two years Most of the ;nvestn:ents~ $i23
million, or 7S percent, are in United States Government Securit;~s. T~e curre~t
market value-of the portfolio is 101.1 percent of cost. Ttle aVErage life of the
portfolio is 2.n years.
IHTEREST RATES A/jD INVESTMENTS
In January, staff invested $2 million in ~hort-term Certificates ~f Deposit, at
II return of 3.35 percent; $~ mill;~n in medium-terril Ij. S. Treasury Note, at a
return of 4.9~ percent; and S5 million in medium-term Federal National Mortgage
Association (FNMA) notes at a return of 5.01 percent.
Even with the Cllrrent low level of rates, the effective annual rate of return on
the po:'"tfolio for the seven months ending January 31,1993 was 6.72. percent.
This ;s i very attracti .... e rite compared to t~e othGr measurements shown belo .. :
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Interest Rates a~anuarv 31. 1993
Prime ~a.te:
3-,,",ntll TreiSury Bill:
3-~nth 8~nkers Acceptance;
J-month Conrnercia\ Paper:
3-month Certificat~s of Depcsit~
2·year Treasury N~te:
2 -:;ear Agency;
Source: Wal1 Street ·]ourr:al 2/1/93
6.00%
1.98%
3.04%
3.1~
3. jo\
4.15%
4.34~
.",,'
The Me-rrill lynch bend indexEs for lJ. S. Treasury 1 to 10 year are at 4.94
percent; t~e hf~h quality (Orporite bonds are 1 to 10 year at 6.45 percent. The
rettJrn is well above the Shears-on leh,"iml'l Brothars J. S. Treasury returns which
are as fol1ow5: 2.92 perCEnt for 3 months~ 3.09 percent for 6 months, 3.33
percent for J year~ 4.56 percent fer 3 years and 5.S! percent for 5 y€afS.
As more funds are pl aced in the current market wlth rate-s bet"Ween J and 6
percent, the overall return w"il1 dedine. However, with approximate1y one half
of tt,e portfol"fo in investments with maturities of ever one year and coupons
ranging from 5.13 percent to 12.45 percent, tnt! decline iII:ill be slower than other
agencies. Tri:50 is all dUIi! to the 0'w'era1l inllestment policj wliicn states, -The
City is ab1e to take advantage of the relatively large reserve balances
maintained by its utilities, which allow it to take advantage of the general
tendfonCjf of thE market to provide a higl"oer return for longe"r'-term investments
(known as liquidity preference).-~ .. aConsequentTy, in the long run~ the City
should average a higher total return than mo~t cities ~;tnout such reserYes to
invest~ ..
tDftPklAHCE WITH INVESTMENT POklCY
As of J&nuary 31, 1992, He investment portfol1n was ir. compliance witt, all
elements of tne City's investment pDiic.y. In february 1993, projections
indicated recE-ipts wou1d be S13.4 mlllionj expenditures wou1d be t13.3 million
and $2:5.6 million in investments WOUld mature. On the basi:; of the above
projection, there are sufficient fUf1ds to meet Palo Alto's expenditure
reQuirelTl>l!nts for the-month of February. Based upon the cash flow projections
prepared by Treasury staff for fiscal year 1992-93~ tnere are sufficient funds
from t~e revenues and maturing in~estments ~o meet all expenditure requirements
for the remainder of the fiscal year.
o:;.:O?;I"'-"'-"::" " Om itt ed , C ~-6lL,J2i
CMR\173:93
EMILY HARRiSON
Finance Director
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BY MATURITY
Within month
1-3 mor.ths
3~6 months
6-9 montns
9·12 months
1-2 y€ars
Within 2 years
2-5 years
5-10 ye.r,
10-20 years
20-30 years
Olle" 2 years
TOTAL
BY TYP~ DE HIYESTMOO
local Agency Investment Fund
.Mutual Fund
Certificates of Deposit:
Col1ateralized
Bankers .Acceptances
Canmerc; oS! i Paper
City of Palo Alto Bonds
U.S. Treasury
U.S. Agency
TOTAL
Mark.et ~alue/Cost
CMR:173:93
REPORT OF INVESTMEHTS
J~ARY 31, 1993
Par A.l'lount
(In S Millions)
$ 15.50
16.00
13.02
14.00
14.50
n.OO
!14.12
48.50
.00
.51
-ill
49.73
163.85
15.00
.10
17.00
6.00
3.00
.02
55.50
~2~
163.85
1/31/9~
~l_
15.61
9.77
7.95
8.54
S.85
~
,9.65
29.60
• DC
.32
__ .4~
30.35
100. "';
9.15
.06
10.38
3.65
1.83
.01
33.87
41.03
100.0%
1991-93 12/31/92
Target (%)
> 56 14.60
12.90
S.18
11. 34
7.86
20.76
> $50 75.63
< 15%
<30%
< 15%
100%
23.59
.00
.33
~
24.37
lOO.~
9.44
.13
13.21
3.77
1.89
.01
32.40
....li.,.li
100.0%
SI66.5/164.6 101.1% > 95% 100.9%
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REPORT Of INVESTIlfNTS
JANUARY 31, 1993
~G.t
l!IYillMUill
Interest Maturity'
_Rill__ -.J1.ili
Par
~
Market
~
LOcal A~ncy Investlll~nt FunUUID
LAIF
MY~1-f.und (O,O~
Fidelity Investm~nts
~fic.t.s of Deposit (10,38%1
~lJmitomo Bank (Collateral)
Fidel ity Feder,l (Coll,teral)
Sumitomo e.n' (Col1.teral)
Sumitomo Bank (Coll,ter,l)
Sumilomo B.nk (Coll.teral)
cidel ity Federdl (Collat@ral)
Fidelity federal (Coll.ter.l)
tgnmercial P~~i!.L~l
General Electric
General Electric
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4,68
2,78
3,90
4,50
4,05
3,40
],35
4,45
],BO
3.35
J,60
01-01-93 15,000,00 15,000,000
01-01-93 100,000 100,000
02-25-93 2,000,000 2,000,000
03-03-93 3,000,000 3,000,000
04-07-93 2,000,000 2,000,000
04-26-93 3,000,000 3,000,000
05-06-93 2,000,000 2,000,000
05-19-9] 2,000,000 2,000,000
07-30-93 ..1..&Q.Q..QQ9 -1,Jl.QQ,]QQ
17,000,000 17,000,000
02-19-93 2,000,000 1,966,872
03-01·93 LJJ_Q!!.0.222 989,800
3,000,000 Z,956,67Z
Unrealized
.wn..JLl1nJ
Purchase
Price
Balance
15,000,000
100,000
2,000,000
3,000,000
2,000,000
],000,000
2.000.000
2,000,000
3,OQO,OOO
17,000,000
l,96b,872
.-9~Q
1,956,672
Page 2 of 6
Accrual
Bas;s
illnilm
52,54~)
246
6,500
jJ ,625
',975
8,783
6,979
7,664
~ . ..ill . 1,) 58,343'
5,769
l..lQQ
B,869
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'~
j
r,
, .",,",,"<J "1 ," r 1
~
~Dk.r. Accep1M!l:~ti~L~Ii.~
SUlJlitomo 8ank
Sanwa Bank
Palo Alll'_l!!1'.!:ovement ]!QI)ds (,Q;~)
Series P
~ Treasurv (33,87~)
n'ea$ury
Treasury Notes
Treasury Notes
Treasury Notes
TtNsury Notes
Treasury Notes
Treasur'Y Notes
Tr£!asury Notes
Treasury Notes
Treasury ~ot.s (0)
CMR: 173:93
Jnter\~st
J~~ __
3.73
3.12
10.95
8,25
6.13
B.OO
B.15
7.75
7.63
7.00
6.00
5.50
5.13
REPORT OF IHVESTM£NT5
JANUARY 31, 1993
Maturity Par
lI.ill.-'liliffl
03-01-93 3,000,000
03-22-93 J~~Q9
6,000,000
07-01-93 20,000
02-15-93 4,500,000
06-30-93 3,000,000
03-15-93 7,000,000
09-30-93 4,000,000
11-15-93 8,000,000
12-31-93 1,000,000
05-15-94 6,000,000
11-15-94 5,000,000
02-15-95 7,OOO,OOQ
11-15-95 9.Q2Q,QQQ
55,500,000
Market
YiliL
2,968,606
l,95Z,3~0
5,925,966
20,000
4,509,375
3,015,938
6,98B,115
4~O35.938
8,081,563
2,Ol6,B75
6,242,OOU
5,164,000
7,173,QOO
2.m.QQQ
56,344,814
Unrealized
Gain (Loss)
170,125
112,437
34,llZ
-R..ill
399,10B
~ ",·'~'"-~~.",m".,.
Purc.h.ue
Price
6.illm_
2,968,60G
l.....ru...w
5,92S,966
10,000
4,509,375
3,015,938
6,98B,125
4,0:15,938
8,061,563
2,016,875
6,071 ,.B75
5.0~1, 563
7,138,82B
_Mll.ill
55,945,706
Page 3 of 6
Accrual
BaSis
f.wJliOJl1
9,636
ll....Mlk)
17,696
183
10,938
10,313
46,667
27,500
51,66:'
11,70B
3\,000
25 t OOO
n,083
-lw.9!
308,7B2
l-
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REPORT OF INVESTMENTS
Page 4 of 6
JANUARY 31, 1993
Plrrchase Accrual
Interest Maturity Par Market Unrealized Price Si\slS
~_QliEU _.RllL pate ~ Yll.!.!L !IDn...L1J!lli flililltL EarnjnQ'
~~~y (4I,Q3%)
FNMA 7.95 02-10-93 2,000,000 2,000,000 2,000,000 13,250 I SlMA 10.50 04··22-93 1,000,000 1,000,000 1,000,000 S,75 U FNMA 10.75 05-10-93 1,000,000 930,937 930,~37 8,95
FHLS 10.75 05-25-92 J ,000,000 998,125 998,125 6,958
Hll8 7.75 07-26-93 1,000,000 99B,750 998,750 6,458 ,
HllB 7.45 08-25-93 2,000,000 2,000,000 2,000,000 12,417
FHlB 7_95 09-27-93 1,000,000 991,875 991,875 6,6,5
rHlB 12.15 12-27-93 2,500,000 7.,437,500 2,437,500 25,313
FHlB 7.\5 01-25-94 2,000,000 2,003,125 2,003,125 12,563
FHle 7.50 06-27-94 5,COO,OOO 5,202,000 120,e12 5,087,188 31,250
FNMA 7.45 07 -11-94 3,000,000 3,127 ,DOC 95,203 3,036,797 18,625
FHl8 6.70 08-25-94 8,000,000 8,258,000 73,750 8,246,250 44,667
FHlS 6.56 09-26-94 4,000,000 4,13~,OOO 51,312 4,104,680 21,933
FHlB 5.94 02-27-95 6,000,000 6,131,000 152,875 6,010,125 29,700
FHlB 6.45 03-27-95 8,000,000 8,260,000 250,000 8,G6S,OCO 43,000
FHlB 6.04 04-25-95 6,000,000 6,143,000 186,625 5,999,375 30,200
FHlB (h) 7.95 12-26-95 3,000,000 3,091,000 125,000 3,000,000 19,875
FNMA (c) 7.70 02-12-96 2,000,000 2,068,000 86,500 1,997,500 12,8]3
FN~A 7.60 01-10-97 2,000,000 2,120,000 151,167 2,OOZ ,813 12,661 ') FlB 7.35 01-20-97 500,000 523,000 34,000 500,000 3,063~'
FHM 6_05 01-12-98 5,000,000 5,069,000 11,345 4,997,655 16,805 I FHLMC (P&J) 10_00 02-01-09 315,609 352,000 41,797 299,203 2,642 ,
'1 FHlMC (P&I Semi-Annually) 12.45 09-15-09 203,000 237,000 15 1 375 221,625 2,lU6
·i~ GNMA (P&J) 9_00 ll-15-16 ZQUM m,ooo ~l.L_ill m.m ~ ,
67,226,467 69,158,312 1,483,004 67,675,30B 397,987
CMR:173:93
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:&Ulli
~t..ured and So 1 (tllL't!'~tme!1ts
Franklin Investments
Sumitomo B.nk (Col1aterol)
fidel ity r.deral (Collateral)
Treasury Notes
fidellty federal (Collateral)
Interest
_!l.ili
3,11
4,30
4,00
8,75
4,00
REPORT OF INYESTMFNTS
JANUARY 31, 1993
Maturity
Oat.
01-01-93
01-06-93
01-11-93
01-15-93
01-20-93
.-.. r
'ii.lM
Market
klllL
Unrealized
~U&ul
Purchaso
Price
1LillnR.
Page 5 of 6
At:crual
Oasis
fJu:n1n!l1
2,70~ )
1,433
2,444
7.292
4,444
TOTAL INV[STM[NTS(IOO%) $163,846,467 $166,505,764 $I,88?,112 $164,623,652 ~86J.97S
(P&.I) Princl~)al and Interest payments monthly. Investments with maturities of 'less than One year ,"Ire valu~d at cost.
Purchases since lyst report are shown in boid type.
(a) Percent figure represents the discount rate.
(b) FHLB has a callilble option, beginntng t)n 12-21-93,
(c) i'NMA has a callable option, beginning on 02-12-94,
(*) Of the $9 mi 11 ion in U. S. T rea 5ury Not~s maturl ng on 11-15-95, only $6 mi 11 ion were purchased in January.
CMR;173:93
I.f.
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Work
Unit
Interest IncolTN! S Effect.v. Annual
Rate of Return
On InvestlM!nts ~
CMR:173:93
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INTEREST INCOHE (ACCRUAL BASIS)
JANUARY 3l, 1993
~r;crease
To Date To Date (Decrease)
~ 1992-91 1992-93
5,965,308 6,038,218 72,910
8.00 6.72 (1.28 )
Page 5 of <;
~ Of
Target
hrg~t To Oat.
9,648,000 61.5S
6.0 112.00