HomeMy WebLinkAbout0103.094,
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January 6, 1994
THE HONORABLE CITY COUNCil
Palo Alto. Calilomia
I!'!/VESTMENT ACTIVITY REpoRT FOB 1I10VEMBER 1.sn
Members of the Council:
This is an informational report and no Council actton is necessary.
INTEREST INCOME
Interest if'lCOme on an accruaf basis for the month of November was $774,263. FOf
the first five months of 1993-94, ~nterest income totaled $4.0 miliion, or 41 percent
of the annuar target of $9.7 million. Effective November, staff began the process of
adjusting accrued interest income ror premiums and discounts. A premium or discount
occurs at the time of purchase, based on the spread betwee~ current interest rates
and the coupon rate of the irKHlJldual security. The adjustments for prem:ums and
Ctscounts resurted in reducing the year-to-date accrued interest income by $200,000.
The effecttve rate of return on an accrual basis is 5.37 percent for the fiscal year.
CURRENT poRTFOLIO
The par value of the City's portfolio r~ $182 mil!ion, which consists of $161 million,
or 88 percent, matufir!Q within two years. Most of the investmems, t 1 34 million, Of'
74 percent, are in United States Government securities. The .cu,rent market value of
the portfolio is 100.5 percent of cost. The average jife of the partfafio is 1.2 years.
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INTEREST RATES AND INVESTMENTS
In November, staff inve!ired .$6 million in Ba:1kers Acceptances with maturities from
one to four mcnths at returns ot 3,13 10 3.42 percent. aOO $2 mWfon in three~year
Treasury Bills at a return of 4.43 percent.
The following graph shows the rate of retum for the City of Palo Alto', investment
portfofio and the rates of return on 2-vear and gO-day Treasury Bills. These two
treasury measures are important because they represent a conservative investment
strategy. The yield 01 the City ponfono is significantly higher thar: both measures.
The favorabre return IS primarily due to Jong-term. higher yield investments,
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CMR'03:94
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kOMPLIANCE WITH iNVESTMENT POUr;a
As of November 30. 1993, the investment portfolio was in compliance with aF1
elef'TlP..nts of the CiW's investment policy. In December 1993. projections indicated
receipts would be $11.9 million, expenditures would be $19.6 mil!ion, and $23.£
mjjjioo if I investments would mature. On the basis of the above projection, there were
sufficient fur'lds to meet p~ro Atto's expenditure reQuirements for the month of
December. Based upon the cash flow projflctions prepared by Treasury staff for fiscal
year 1993-94. there are sufficient funds trom the {evenues and maturing investments
to meet 8U expenditure requirements t04' the remainder of the fiscal year.
RespectfoJlly submitted,
_;:~~_#~7
GORDON FORD
Treasury Mana ger
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Finance Director
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.... Sista"t~~ger
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Page 1 of 5
REPORT OF INVESTMENTS
NOVEMBER 30. 1993
Par AmC'u.nt 11/30/93 '993-94 , 0/3' /93
(1n • MiJliqns) Jl2L ~ ~
BY MADJBID'
Within ~ mcnth I 23.60 '2.96 > $6 12.68
1-3 month$ 13.00 7.14 6.86
3-6 months 34.00 18.67 17.02
6-9mont1a 16.00 8.78 7.59
9-12 months , 1.00 6.04 7.69
'·2 years a2Q ~ .1M1i
WrtNn 2 YBaf'$ '60.60 8e.18 > $50 81.59
2-5 years 20.50 11.26 17.84
5-10yeau .00 .00 .00
10-20 years .42 .13 .24
2Q.JO .-, ---Al ~ .-aJ
Over 2 '(8oiIni 21.53 11.82 18.41
TOTAL 182.13 100.0% 100% ,QO.O%
Bl TYPii gF INVESTME!fi
locar Agency Investmet1t fund '5.00 8.25 8.25
Mutua' Fund .10 05 < 15% .05
CertifICates of Deposit:
Collateraraed '9.00 '0,43 10.43
Bankers Accepta(tC1ls B.OO '.39 < 30% T.10
Commercial Peper 6.00 3.29 < 15% 3.29
U, S. Treasury 6'.00 33.49 36.78
U.S.4gency ~ !llQ £UC
TOTAL 18.1.13 '00.0% 100% '00.0%
Market Value/Co .. t $184,1/183.1 100.50% > 95% '00.8%
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Pawa2of8
REPORT OP INVESTMENTS
NOVEMBER 30. 1993
futch.a8 Accrual
Interest Maturity Par Market U", .. :ized Price S.,is
~ _!lilt.. JllIL. YIlIUI 'iIllIJI Gli[lILDlal I!IliIla Wnicm
lNllESTMENTS
i.gcal ,Agency loye.t!ment Fund (8.25%) •
lAIF 4,33 11·01-93 15.000.000 15,000.000 15.000.000 54.750
M~i!' EYrul1Q.Q~~J
Fidelity Inv8stmen\s 2,80 11-01-93 100.000 100.000 100,000 230
Ce rtifit;.ttel .... 2fJ2£lJm$!1..i!.Q..!Jj!J
Sumitomo Bank (Collateral' 3,20 02-18-94 3.000.000 3.000.000 3.000.000 8.000
Sacramento Banlr. ICl)lioterali 3,20 02·22-94 3,000,000 3,000,000 3,000,000 8,000
Sacramonto Bank (CoUatel'sll 3.20 03-10-94 3,000,000 3,000,000 3,000,000 8,000
Sumitomo 8ilnk (Collateral) 3.40 03·28-S4 2,000,000 2.000,000 2.000,000 5,667
Sacramento Bank (Colinter"l) 3,30 04-08-94 3,000,000 3,000,000 3.000,000 8,250;~0
Sumltomo Bank (CollllteralJ 3,30 04,28-94 3,000,000 3,000.000 3,000.000 8.2S~i'
Sumitomo hank. (Collateral) 3,40 OS-29·S4 2,000,000 1 000 000 LQl!ll.QQQ -hllli1
19,000,000 19,000,000 19,000.000 51.834
Cornmercitll ~~..%l
A'sociatos of America 3.18 12-01·93 3.000,000 2.968,200 2.968,200 7,S50
Gu.,eral Electric 3,29 01-31-84 MQD.Ollll 2..950.ll50 2.9'D.850 ..b...ID
6.000.000 5.818.850 5.918.850 16,175
CMR:l03:94
P-ue 3 of 6
REPORT OF INVESTMENTS
NOVEMBER. 30. I Y93
POl'chQ5e Accrual
Intereat MaturitV Pa, Market Unrealized Price 8 .. 1.
~ -'lolL . ..QlI.\L ~ YIli.I.i Gllin fLost) ~u.. EirO!lngJ
Bank". AQClpf.nce ~) • SenwlI b."k l.12 12.(19·93 1.000.000 997.313 997.313 1.907
Senw. B.nk 3,26 02.()7·94 2.000,000 1.984.833 1.984.833 2.708
Sumttomo B.nk 3.33 03.()7·94 3.000,000 2.967.266 2.967.255 6.828
Sumitomo 81!10" 3.20 03·16·94 2 000.000 1 972622 ---I..!!ll.J!22 ~
B.OOO.OOO 7.922.023 7.922.023 15.716
y .... S ...... JJ_'!aI.u ..... (33 ... 49%-)
Treasury Notos 7.63 12·31·93 2.000.000 2.016.875 2.016.875 12.148
T(ea8ury Notes 5.36 04·30·94 12.000.000 U.2b2.071 12.252.0'11 35.:174
Treasury Notes 7.00 05·16·94 6.000.000 6.071.8"15 6,071.875 32.627
Treasurv Not.s 6.00 11·15·9' 5,000,000 5.051.563 5.051.563 23.472
Ifeasury Noto. 5.50 02·15·95 7.000.000 7.138.000 18281 7.138.878 27.51~
TraaslIry Notos 3.88 09·30·95 7.000.000 6.967.000 126.9841 6.993.98' 22.855
T(8as.ury Notes 5.13 "·15-95 14.000.000 14,245.000 139.642 ".105.158 56.681
Treaaurv Notes 4.63 02-16·96 6.000.000 6.041.000 34.594 6.006.406 22.947
lUI'lury Notet 4.38 11-15·96 .kQQlI.J)(!2 1 991.000. .l§.7J..!ll .Yll!!.21l! ~
61.000.000 61.774.38A 140.905 61.633.479 236.299
CMA:l03:94
Paga'" of 8
REl'ORT Of INVESTMElfrS
NOVEMIlI'R 30. , 883
Purchase Accrulll
Intfttest .... aturity Par Market UnrHli~lJd Price 81,1,
SO.llllCf ~ -ImL Y.aIla YIlI!l! Glin ilou) llIlIwa.. ~
lI.&.1\lID!ICY 140.10%1
FHL8 1~.15 12-21'93 2,500,000 2,437,500 2.437.500 26.81.
FHL8 7.5~ 01·25-94 2,000,000 2.003,125 2,003,125 12,498
FHUI 7.50 06-2'/·94 5,000.000 6.087. '88 5,087,188 2e,l03
FNMA 7.45 07-' H4 3.000,000 3,035,797 3.038,797 17,597
FHLB 6_70 08·25-94 8,000,000 8,246,250 8.248.250 36.758
FHlR 6,58 09-28-94 4,000,000 4,104,688 4,104,688 '8,674
FHU~ 5.94 02·27-95 6,000.000 6.139.000 120.875 6,018, '25 29,151
FHL8 6.45 03·27-95 8,000.000 8.245.000 180,000 8,065,000 41,176
FHLB 6.04 04'26-96 6,000,000 6, '56,000 156,625 5,999,375 30.218
FNMA 3.84 05-02-95 2,000,000 1,984,000 17,2501 1.991.250 6,774
~HlB 3.79 05-28-95 3,000,000 2,964,000 119,594' 2,983,594 10,159
FNMA 4.32 06-06·95 3,000.000 2,989,000 124,5931 3.013,593 10,908
TVA 4.13 08·15·95 7,000,000 6,969,000 128,813) 6,997,813 24,154
FHLO lal 7,95 12-26-95 3,000,000 3,002,000 2,000 3,000,000 19,675
FNMA Ibl 7,70 02-12-96 2,000,000 2,013,000 15,500 1,997,500 12,875
FNMA '/,60 01-10-91 2,000,000 2,150,000 147,187 2,002,813 12,644
HB 7,35 01-20-97 SOO,OOO 532,000 n,QOO 500,000 3,06tl'~ fNMA 6,05 01,'2-98 5,000,000 5,164,000 166,345 4,997,655 25,24:;:
FHLMC IP&II 10,00 02·01-09 242,744 266,000 39,682 226,338 2,068
FHLMC {P&! Semi-AnnUillIvl 12,45 09-15·09 182,000 213,000 12,375 200,625 1,803
GNMA (P&II 9,00 11-15-16 _.J!!U~ -1JllJlQQ _..J..2M1 -1J3lLW! ~
73,032,144 74,352,548 805,000 73,547,548 374,731
CMR:I03:94
REPORT OP INVESTMENTS
NOVEMBER 30. , 993
Int8(681 Maturity POt ~ l!ilo.. ..I!iIL YahJ.t
~tQd Hod Sg.l:d .. !nYesrm'nts
n.alury Not •• 7.75% "·'5·93
TOTAL INVESTt.'ENTS $182.132.~44
(P&I) Principal and interest paymentl5 mOl'lthly,
InvlIstments with maturities of tess than one VlltU are valued at cost.
Purchasos sioce last (eport are shown in bold type.
(81 f:HLB hal It oallable option, beginning on 12-27-93,
ib) FNMA hat> 8 callable oPtion, beginning on 02-12-94.
CMR103:94
NlII'ke1
.\!1M
.'84,067,805
P_50'6
Purch'58 ACcrual
Unt8aliz8d Price Ba.I.
llmlWll .~ UrnltJgJ
• 24,469
$945.905 $'83,121.901 1774,263
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INteREST INCOME IACCRUAL BASIS I
foiOVEMBai 30. 1993
Work To Oalf!
llDil illUJ
Lnterest In~ • 4.312.181
Effectj· ... Annual
Rate of Ret1;m
On 1n-.'8JOtmentB % 6.81
Inlentit Balm. n qf Npvember 3Q 1 993
Prime Rate;
3-rnonth Treasury' Bin:
3-month Bankers Accectance:
3-month Com""",,",! Paper:
3-mon1h Cenfficate5 of DepoSit:
2-)1eat Treasury Note:
2-year Agency:
Source: Wall Stroet Journal 12101/93
CMR: 1 00:94
To Cate
~
~.C09.072
6_00%
3.12%
3.29%
3.44%
2.74%
'.10%
4.0%
5.37
Incre:u.e
'Decrease)
1993·94
1303.1031
11.'41
Page 6 of 6
%01 T...,..
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9.700.000 41.33
5.5 97.70
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