HomeMy WebLinkAbout0312.093-
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May 20, 1993
T~E ~OHOR'.BlE CITY COUi,Cll
Palo Alto, Caltforn'a
IMVESTHENT ACTIVITY REPORT FOR APRIL 19.3
Members of the Council:
This is an infor.nationa1 report ar,d no COljrc'rl action ;s necessary.
iMHREST INCOME
Interest income on an accrual basis for the month of April was $882,049 and for
the first ten months of 1992-93 totaled S8.6 m;llio~, 83 percent of the re~ised
annual target of 510.4 millior.. On a cash basis, receipts totalled $628,148 for
Maren. and $8.5 r.1il1ion y€ar to date. Ttle effective annual rate of return !In an
accrual basis is 6.56 percent for the current fiscal year.
CURRENT PORTFOLIO
The par value of the City's portfolio is $172 ~ill~o~. which consists of $139
mtlTiori, or 80 percerlt, maturing within two years. Most of tne invt!stments, S138
million, or SO percent, are in United States Governm€nt Secur~tie~. The current
mark.et value of the portfolio is 101.3 percent [if CD:>t. The aver-age life of t"e
portfolio is 1.5 years.
INTfREST RATES AND~INVEST~ENT5
In Apri1 7 staff invested $9 million In Certificates of D€posit. at a return of
approx;mate1y 3.27 percent.
fnterest rates have decljn~d sign~ficantly during the last (oup1e of years and
no~ the U. S. Treasury has made poTiey changes that will affe(t yields further.
It plans to issue 30-year bo~ds only on a semi-annual basis (pr.eviously issued
monthly) while eliminating the sdTe of 7-year note:> altogether. Ao:ording to
financial institutions, this will cause an increase in supply for the 5-and 10-
year notes and a decrease in supply for the 3D-year bond. In a normal yield
curve (see 5/13 examp1e), rates are higl"1er as the term becomes longer, but if
there arises a shortage of 3D~year bonds. tne price of the 30-year bond would
increase arid its interest rate would correspondingly decrease. Also, if the
CMR,l11 :93
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TreasjJry is.sjJes mo'"e sllort·term p3per (5-..I'NI'" nates and lj~lder), L1en that sUPPlY
w~ll increase, and so will its interest rate. Therefore, the financial brokers
forecast a s1ight interest rate incre~se fur short·t~rm securities, a~d a slight
interest rate decrease for long-term securities. These cha:'1ges should thiS
contribute to the grad~al flatteni~g of the yield curve.
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CO~PLlANCE WrTH INVESTMENT POlley
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.e.s of April 30. 1993, the investment portfolio wu in complillnce with all
elements of the City's investment pnlicy. In May 1993, projections indicated
receipts 111,11 be $13.9 million; expenditures will be SILl minion and $21.1
million in investmer,ts \lri11l mature. Or. the basis of the :lbave projection, thert~
are sufficient funds to meet Palo Alto's expenditure requirements for the mont~
I)f May_ Based upon the cash flow projections pr€pHed by Treasury staff for
fiscal year ;992-93~ there are sufficient fund~ from the revenu€s and maturing
in~estments to meet all expenditure requirements for the remainder of the fiscal
;:#
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$ear.
~~.i~~;~_:ubmitt.d. ~ra~
Finincfal Analyst Finance Director
CMR:312:93
o
BY HATU!ill1
Within 1 month
1·3 month:;
3-5 montt1s ., 6·9 months
9-12 months
1-2. years
\!Iittlin , years
2-5 years.
5-10 y~ars
10·10 years
20-30 years
Over 2 years
TOTAL
8Y TYPE Of IHVESTMaa
local Agenty In~e5tment Fond
Mutual FunG
Certificates of Depos.it:
Coll ateral ized
Bankers Acceptances
Corrrnerc~al Paper
City of Palo Alto Bor,ds
U.S. Treasur.y
U.S. Agency
TOiAl
Market Value/Cost
CMR:311:93
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REPORT Of INVESTXENT5
APRIL 30, 1993
Par A,'l';Jur.t
linJ. ~ilJiDns)
S 11.10
1.02
11.00
14.50
11.00
S8.00
138.61
3.2.SG'
.00
.51
.70
33.70
111.33
15.00
.J 0
16.00
0.00
3.00
.01
14.00
il.cU
Ill.33
S175.8/173.5
12.14
4.07
9.86
8.41
12.19
33.66
80.44
19.&6
.00
.29
__ .4_1
19. S6
!OO.{)'r~
8.70
06
9.28
.00
1.14
.01
42.94
J7.26
100.0%
Pagelof6
1992·n
I~ggL
3/31/93
1%1
> $6 11.91
S.29
12.35
7.34
1.11
~] .6tl
> 150 76.67
lO~%
< 15%
< 3m~
< 15%
100%
12.61
.00
.30
-:..li
13.33
lOC.O%
8.81
.50
7.05
.00
1. 76
.(li
4i.41
_3~.31
lCrO.0%
101.3% > 95'~ 101.3%
,
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~ ~11JLtrs / tntel"e.<:;t
-B~ ~~~~~il!trtL[Y~. 700, LA I F """"'~
~(PoRT OF INV£lT~NTS
APRJt 30, 1993 Mdt~rjl.Y
~~ Par
~~ If·'ket ~ /
i ~t~~J~~
F id., i!)' In.~St"'ots 4,6V
os./)}. 93
15 ,D()o,OQ
lS,OOV,OOO ~C1.l!isut!!S f 2.)'7
OS'01'93 S· ~<> .. j)L~~PfJ£i1 ~
lOo,OOQ
{JfiJtt.(rJ.fjO B --§:
10 0,000
Ffd J. "'" Ie 1/ rid:, !ty r~de"alo at erd1 }
s"cr;';:;;,retk".1 ff::;/.t~,.,!
3,35
Os. Qf;. 93
Sac,. " 8;,,,~ (c .t.'OII 4,15 Sulfltt"""'nto S"'k (c ""aterdl)
3,80 05 '19'93 2,000,000
2,000,000
~ 8.~ (COlf'ldter,,)
3.20 01']0'93 l,ooa, 000 .t.r •,)
3.30 02'Zt'94 3,000.000 2,000,000 3.3Q 04'08'94 3,000,000 3,000,000 ~.Ip
04 '26'94 3,000,000 ,3,000.000 ~p....QQQ ~.ooo,ooo --z~~
-~
Goner. r n. . 4!) (dJ
J6,OOD,()()O
ectr,C
3,IJ
u"rpdll J;~(j fiiJJl.-fJ.QA~ ) Purch.jse
P"ice D,t~
15,Oaa,ooo
100,000
J ."'."""-." ,,~ ""'br "'~"·'''c .. JIIIIII __ ........
Page ~ of 6
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2,(1)0,000
3.00o,QOV 3,000,000 3 0 000,000 ..J..~@p
16,OOO,OVo
2,96 0,6J4
5~5aJ
7,1}J
9,500
J,(J57
6,050
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Pa 10 A 1 tumDrovement Bonds .L..Qill
Serle~ P
!,
~ VJji~,~~Iil'LL4U~~1 l Treasury Notes
~ Treas.ury Notes
Treasury Notes
Treasury Notes
Treasury Notes
Tredsury Notes
Treasury Notes
Treasury Notes
Treasury Notes
Tr~a'iury Notes
Treasury NotE'S
CMR:312:93
REPORT OF INYESTHEHTS
APRIL 30. 1993
Interest Maturity Par Market
~.t. Qat. 'iili!: ~
10.95 07-02-93 20,000 20,000
8.13 06-30-93 3, ODD, 000 3,015,938
8.00 08-15-93 7,000,000 6,988,125
B.25 09-30-93 4,000,000 4,035,938
7.7S 11-15-93 8,000,000 8,091 1 563
7.63 12-31-93 2.000,000 2,016,875
5.38 04-30-94 12,000,000 12,l52,OOO
7.00 05-15-94 6,000,000 6,221,,000
6.00 11-15-94 5,000,000 5,Ill,OOO
5.50 01-15-95 7,000,000 7,210,000
5.ll 11-15-95 14,000,000 H,J46,OOO
4.63 01-15-96 ~,W_JIP.Q 6,Q66,222
74,000,000 75,410,439
Unrealized
Gain (Lolli
(71 )
149, ]25
125,437
71.1,'2
240,842
~~
646,099
Purcha~~
Price
B.~,
20,000
3,015,938
6,988.125
4,035,936
8,081,563
2,016,875
12,252,011
6,071,815
5,051,553
7,]38,823
14,105,158
-.hQQh1_Qlo
74,164,3 d O
Poqe 3 of 6
Acc.n,a 1
Basis
UrnlnQ"
183 0
20,313
46,667
Z7,500
:11.667
12,708
53,750
35,000
25,000
32_083
59,791
~..ill
}87,60S" )
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SOURCE
U. S. AGENCY (3J..zll
fN~,A
fHlS
FHlB
FHlB
FHlB
FHlB
FHI.B
FHlH
fNMA
FHI.B
FHLB
fHLS
FHlB
fflLB
FHLS (b)
fNMA (e)
fNMA
flA
fNMA
FHlMC (P&!)
FHlMC (P&! Semi-Annually)
GNMA (P&!)
CMR:312:93
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M~tured and Sold Inve~~ent~
Sllll11tomo Bank
SLHA
Sumltomo Bank (Collateral)
REPORT OF INVESTMENTS
APRIL 3D, 1993
Interest Matur1ty
--B.t~_ Oat.
4,05
10.50
3.40
04·07-93
04-22-93
04-26·93
Par
~.
Harket
~-
Unrl!alized
Gatn (Loss)
Purchase
Price
BalallS:~_
TOTAL INVESTMENTS(IOO%) 1172,326,570 1175,820,365 12,320,000 1173,500,365
(P&I) Principal and intHest payments monthly.
Investment~ with maturities of less than one year are valued at cost.
Purchases since last report are shown in bold type.
(a) figure represents the discount rate.
(b) FHlB has a callable option, beginning on 12-27-93.
(c) FNMA has a callable option, beginning on 02-12~94.
CHR:312:93
Page 5 of 6
Accrual
Basis
Eatn.in!11
1,575 0
6,417
7,367
IB8~,049
)
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I
INTEREST INCOME (ACCRUAL 8ASIS)
APRIL 30, 1993
Oicrk To Date
Unit l.221.:ll
Interest Income S 8,537,892
Effective Annua1
Rate of Return
On In\lestments % 7 _66
Interest Rates as of Apr; 1 30--, L~93
Prime Rate:
3-mQnth Treasul"Y 8i 11 :
3-month Bankers Acceptance:
l-montn Corm-rercial Paper:
3-month Certificates of Oepo~it:
2 -year T f'easu rj' Note:
2-year Agency:
Source: Wali Street Journal 5/03/93
CMR:312:93
To Date
19_9Z-~1
8,630,961
6.56
6.00%
2.88%
3.01%
3.11%
2.75%
3.77%
3.83%
In-:rease
(Decrease)
) 99_Z2L
93,070
(LlO)
Page 6 of 6
% Of
Target
T a r.s.tl. To Date
10,400,000 82_ 99
6.5 100_92