Loading...
09/17/2019 06B August 2019 Investment Transactions Report a\'4\lyy bxk ik 1 1-:41 PPPPPP+Pd s' lii it tYlltYlA.\ta. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEM ENT Item No. 6.B. For Meeting of: September 17, 2019 ITEM TITLE: August 2019 Investment Transactions report SUBMITTED BY: Steve Groom, Director of Finance and Budget SUMMARY EXPLANATION: During August, two $1 million purchases partially replaced one $3 million that matured, improving diversification by maturity date. During June and July no investment transactions matured, were called, were sold -therefore none were purchased. Monthly report of all investment transactions. Each investment is in full compliance with the City's Investment Policy, State Statues and City Municipal Code. This monthly report is in compliance with RCW 35.39.032 which requires "The responsible official or committee shall make a monthly report of all investment transactions to the city legislative authority" A complete Treasury report is provided to City Council quarterly that provides a complete position listing with further analysis, economic outlook and strategy updates. ITEM BUDGETED: Yes STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR Interim CityManager SUBMITTAL: (---47 , - 9 STAFF RECOMMENDATION: Review only. Submitted for routine transparency and accountability. BOARD/COMMITTEE RECOMMENDATION: ATTACHMENTS: Description Upload Date Type Au est 2019 In st ent Transaction 9191 019 r Me o 2 3 FINANCE DATE: September 6, 2019 TO: Mayor and City Council Cynthia Martinez, Interim City Manager FROM: Steve Groom, Finance Director RE: August 2019 Investment Transactions No investment transactions matured, were called, were sold - therefore none were purchased -during the months of June or July. The investment transactions for the month of August were: Matured: $3,000,000 FFCB (1 .25%) matured Aug. 19, 2019 Purchased: • $1 ,000,000 FHLMC (2.150% yield) to mature Nov. 14, 2022 • $1 ,000,000 FHLMC (2.250% yield) to mature Aug. 12, 2024 The investment committee reviewed and approved the rationale for these purchases. $1 ,000,000 remains to be reinvested. What these two investments accomplished: 1 . Protected our average yield, in an eroding yield environment, 2. Improved our diversification by maturity date by re-investing $1 million per maturity date. 3. Even out our diversification by issuer reducing FFCB and increasing FHLMC The summary page from the Investment Committee review of each transaction is attached and articulates the rationale for each purchase at the time it was made. Each investment is in full compliance with the City's Investment Policy, State Statues and City Municipal Code. Each transaction considered ongoing cash flows from city operations, debt obligations, liquid and maturing securities, and contingencies to meet the City's future cash flow requirements. This monthly report of all investment transactions complies with RCW 35.39.032 ("The responsible official or committee shall make a monthly report of all investment transactions to the city legislative authority'). 4 rVim i` I: x FINANCE Committee Review of Investment Rationale Date: August 9, 2019 Investment # 2019-1524 is a 3-year Federal Home Loan Mortgage Corp (FHLMC) Agency new issue, face value $1,000,000, maturing November 14, 2022, 2.150% coupon purchased at 100.000 to yield 2.150%. This trade settles August 14, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment is the first of three to replace a $3,000,000 1.25% FFCB medium term note maturing August 19, 2019. Liquidity: At July 31 month-end, Key Bank checking account balance was $9,551,792, target is $3 Million. US Bank checking balance was $2,539,448. Current invested yield segment of portfolio is now $56,602,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,316,288; target minimum is $3,000,000. Safety: This purchase is a debt issue of FHLMC, one of the Federal Agencies that carries an implicit Federal guarantee, equivalent to Aaa/AA+ rating by Moody's and S&P. Yield. Yield is 2.150%. This investment is 23 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.3883% www.secureaccess.wa.gov 5-year Treasury 1.5400% www.treasury.gov Callability. This is a quarterly-callable investment. Diversification. This purchase brings this issuer to 4.0% of total portfolio. This purchase adds a maturity date previously not covered to city's laddered portfolio, Outlook. The yield curve is currently inverted, the 1-year Treasury at 1.79 and the 5- year at 1.54. The Federal Reserve Bank just executed a 1/4-point rate cut. With $10 million in our portfolio maturing in August, September and October, we are filling maturity gaps in the ladder as well as methodically purchasing 5-year maturities. Investment Committee review: Finance Director: . __ ;r _ :r.:..: Date , City Manag : 1'' Date 1 / 9 5 ,a FINANCE Committee Review of Investment Rationale Date: August 9, 2019 Investment # 2019-1525 is a 5-year Federal Home Loan Mortgage Corp (FHLMC) Agency new issue, face value $1,000,000, maturing August 12, 2024, 2.250% coupon purchased at 100.000 to yield 2.250%. This trade settles August 12, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment is the second of three to replace a $3,000,000 1.25% FFCB medium term note maturing August 19, 2019. Liquidity: At July 31 month-end, Key Bank checking account balance was $9,551,792, target is $3 Million. US Bank checking balance was $2,539,448. Current invested yield segment of portfolio is now $56,602,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,316,288; target minimum is $3,000,000. Safety: This purchase is a debt issue of FHLMC, one of the Federal Agencies that carries an implicit Federal guarantee, equivalent to Aaa/AA+ rating by Moody's and S&P. Yield. Yield is 2.250%. This investment is 13 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.3883% www.secureaccess.wa.g©v 5-year Treasury 1.5400% www.treasury.gov Callability. This is a quarterly-callable investment. Diversification. This purchase brings this issuer to 6.6% of total portfolio. This purchase adds a maturity date previously not covered to city's laddered portfolio. Outlook. The yield curve is currently inverted, the 1-year Treasury at 1.79 and the 5- year at 1.54. The Federal Reserve Bank just executed a '/4-point rate cut. With $10 million in our portfolio maturing in August, September and October, we are filling maturity gaps in the ladder as well as methodically purchasing 5-year maturities. Investment Committee review: Finance Director: Date City Manage . Date o91� 6 44:1C-Crit•% I.%• 10%,. *f •*1% -t Vti%•.% FINANCE City of Yakima investment Portfolio Maturity Dates arcs Amounts 17=6,0C9=r0C :=5=.1C0,01=P ci=:=CC=AKil; 53,3LOP3C =====.1.q I I I II I „, II II 1111 se s s City of Yakima Dtvermlicatten by Issuer FHLMC 5%000,000,7% . FHLB 56,180‘,000 4 4444342% $PRIPORP KO Strip $2,119,009,3% 224444. . .s 4E4 4241:4222' S1021111420% iv:%Mr 445:4 442121 144# PAMPA $2,D00,000,3% SiEfat* APPie, $1,00ofruno,2% tiff aNY $1.000,000 1% USBancorp r $1(XXI GOO „ rr Wan a rt 51,000,006 Fban $9,4115,000 12% „ ***sus_ r4 Microsoft, S1,000.000 1% ismatiE: "Lirs--,71)3 estetiundsesseb tson ADD02224224 8888888888meuesentrUN4444442 Ixtz)))4..±:_,I: taptuture22242422222244422 as));::3:Ftts4 888=es---mt sumaterturstreeem2422444212- wso 4E44 „ft, rzt isriE 4222444444444244,44,42224,4222. 41i!.4 41144 44.:#1 i144444444444444444444445424g. 4444444444444444glggr. ,..4,8,88ant*rirtg 444833244444244422422SD eiata4384,-=#% 444222242444444422D sts4 813.4%.-=Fi eeee%422222444F. 144444442242444—