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11/19/2019 06C October 2019 Investment Transactions Report a\'4\lyy bxk ik 1 + PPP d g. P A PPPPPP+Pd s' lii it tYlltYlA.\ta. BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 6.C. For Meeting of: November 19, 2019 ITEM TITLE: October 2019 Investment Transactions Report SUBMITTED BY: Steve Groom, Director of Finance and Budget SUMMARY EXPLANATION: 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 SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: Review only. Submitted for routine transparency and accountability. ATTACHMENTS: Description Upload Date Type C to r 2019 In stment Transactions e rt 11/1212019 r Mery a 2 ,44 FINANCE DATE: November 12, 2019 TO: Mayor and City Council FROM: Steve Groom, Finance Director RE: October 2019 Investment Transactions The investment transactions for the month were: Matured/Called: • $3,139,000 RFCSP (1 .990%) matured Oct. 15, 2019 • $2,160,000 RFCSP (2.479%) matured Oct. 15, 2019 • $1 ,000,000 FNMA (2.300%) called Oct. 30, 2019 Purchased: • $1 ,000,000 FHLMC (2.15%) to mature Aug. 26, 2022* • $1 ,000,000 FHLMC (2.25%) to mature Oct. 16, 2023 • $1 ,000,000 FHLMC (1 .75%) to mature July 10. 2023 • $1 ,000,000 FHLMC (2.02%) to mature September 17, 2024 • $1 ,000,000 FHLMC (1 .75%) to mature October 15, 2021 • $1 ,000,000 FAMCA (2.15%) to mature June 5, 2024 • $1 ,000,000 US Treasury (2.250%) to mature November 30, 2020 • $1 ,000,000 FHLB (1 .85%) to mature July 24, 2024* • $1 ,000,000 FHLMC (1 .88%) to mature Oct. 28, 2024* *One purchase replaced a Sept. maturity and two were to reduce the city's LGIP balance. What these investments accomplished: 1 . Protected average yield, in an eroding yield environment, 2. Improved diversification by maturity date and by issuer. 3. Improved predictability of budgeted revenue. The Investment Committee reviewed and approved the rationale for each purchase. 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'). 3 :01: jL FINANCE City of Yakima I nvesrment Portolio hiaturtry gates and Arlounts SI,UUCC,CC9 C>,OCCCC. S4Mff C") C3,OCC5C4:) S10C+C COO T :2 �t C . .�` ) 1 ht ✓ �. : �" i O'� 'n r, ea c ,qn k � C w � 4 ��",��h� < �. t'': l ,3*)) 0 2n• ,ti �,z. �o� r} City of Yakima Diversificat oo ay Issuer FHL3, $7,03c,000,9% itAy FHLMC, FAMCA, $3,000,000,4% $11,000,000,14°1 al et At AAA Treas, $2,000,000,3% Apace, $1,000,000,1% fit Pr BNY, $1,000,000,1% F!'lMA, 59,012,000, USBanxrp, $1,000,000,1°k Waimar t, $1,000,000 1% FFC3, $10:015,000, Microsoft, $1,000,000,1% 13% ism EEEEEEEEEEEEEEEEEEEEEEEEEEEEEET bb. 4 J i 4 '.i � A w.....N FINANCE Committee Review of Investment Rationale Date: September 30, 2019 Investment # 2019-1528 is a 3-year Federal Home Loan Mortgage Corp (FHLMC / Freddie Mac), face value $1,000,000, maturing August 26, 2022, 1.75% coupon purchased at 99.6900 to yield 1.78%. This trade settles October 2, 2019 with Time Value Investments, US Bank Safekeeping. This investment is the second of two to replace a $2,119,000 1.46% F/CO Strip that matured September 26, 2019. Liquidity: At August 31 month-end, Key Bank checking account balance was $10,766,264, target is $3 Million. US Bank checking balance was $5,992,198. Current invested yield segment of portfolio is now $56,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,650,992; target minimum is $3,000,000. Safety: This purchase is a debt issue of 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 1.75%. This investment is 42 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.1673% www.secureaccess.wa.gov 3-year Treasury 1.5800% US Treasury Callability. This investment is callable one time only on 8/26/2020. Diversification. This purchase brings this issuer to 7.8% 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 1.74, the 2-year at 1.63, the 3-year at 1.58 and the 5-year at 1.56. The Federal Reserve Bank lowered the target rate a 1/4-point on September 18. 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: Try , Date <° 7 . City Manager: Date P 5 77 FINANCE Committee Review of Investment Rationale Date: October 4, 2019 Investment # 2019-1529 is a 4-year Federal Home Loan Mortgage Corp (FHLMC / Freddie Mac), face value $1,000,000, maturing October 16, 2023, 2.00% coupon purchased at 100.000 to yield 2.00%. This trade settles October 16, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment is the first of five to replace two ($3,139,000 2.01% and$2, 160,000 2.48%) Refcorps that mature October 15, 2019. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of 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 2.00%. This investment is 17 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.1673% www.secureaccess.wa.qov 3-year Treasury 1.3400% US Treasury Callability. This investment is callable quarterly beginning 4/16/2020. Diversification. This purchase brings this issuer to 9.0% 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 1.58, the 2-year at 1.39, the 3-year at 1.34 and the 5-year at 1.34. The Federal Reserve Bank lowered the target rate a %-point on September 18. With $5 million in our portfolio maturing in October, we are filling maturity gaps in the ladder as well as methodically purchasing 5- year maturities. Investment Committee review: Finance Director: Date (0 Yt 2PI City Manager: Date /0/2/1 6 FINANCE Committee Review of Investment Rationale Date: October 9, 2019 Investment# 2019-1530 is a 3.75-year Federal Home Loan Mortgage Corp (FHLMC I Freddie Mac), face value $1,000,000, maturing July 10 2023, 1.750% coupon purchased at 100.000 to yield 1.75%. This trade settles October 10, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment is the second of five to replace two ($3,139,000 2.01% and$2, 160,000 2.48%) Refcorps that mature October 15, 2019. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of 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 1.75%. This investment is 42 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.1726% wvvw.secureaccess.wa. ov _3-year Treasury 1.3800% US Treasury Callability. This investment is callable one time on 7/10/2020. Diversification. This purchase brings this issuer to 12.0% 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 1.62, the 2-year at 1.42, the 3-year at 1.38 and the 5-year at 1.36. The Federal Reserve Bank lowered the target rate a 14-point on September 18. With $5 million in our portfolio maturing in October, we are filling maturity gaps in the ladder as well as methodically purchasing 5- year maturities. Investment Committee review: Finance Director: Date 1741/1. City Manager: z,/ Date t Diq 7 ri- .•I FINANCE Committee Review of Investment Rationale Date: October 9, 2019 Investment # 2019-1531 is a 5-year Federal Home Loan Mortgage Corp (FHLMC / Freddie Mac), face value $1,000,000, maturing September 17 2024, 2.02% coupon purchased at 100.2769 to yield 1.72%. This trade settles October 10, 2019 with Time Value Investments, US Bank Safekeeping. This investment is the jjijd of five to replace two ($3,139,000 2.01% and$2,160,000 2.48%) Refcorps that mature October 15, 2019. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of 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 1.72%. This investment is 45 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day ield 2.1726% www.secureaccess.wa, ov 3-year Treasury 1 1.3800% US Treasury Callability. This investment is callable one time on 9/17/2020. Diversification. This purchase brings this issuer to 13.2% 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 1.62, the 2-year at 1.42, the 3-year at 1.38 and the 5-year at 1.36. The Federal Reserve Bank lowered the target rate a 1/4-point on September 18. With $5 million in our portfolio maturing in October, we are filling maturity gaps in the ladder as well as methodically purchasing 5- year maturities. Investment Committee review: Finance Director: Date to 4 f City Manager 4 L Date folei 8 2. r. t. '.k'-............ }} FINANCE Committee Review of Investment Rationale Date: October 9, 2019 Investment # 2019-1532 is a 2-year Federal Home Loan Mortgage Corp (FHLMC I Freddie Mac), face value $1,000,000, maturing October 15 2021, 1.75% coupon purchased at 100.000 to yield 1.75%. This trade settles October 15, 2019 with Time Value Investments, US Bank Safekeeping. This investment is the fourth of five to replace two ($3,139,000 2.01% and$2,160,000 2.48%) Refcorps that mature October 15, 2019. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of 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 1.75%. This investment is 42 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.1726°l0 www.secureaccess,wa,goy 2-year Treasury 1.4200% US Treasury Callability. This investment is callable one time on 4/15/2020. Diversification. This purchase brings this issuer to 13.2% 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 1.62, the 2-year at 1.42, the 3-year at 1.38 and the 5-year at 1.36. The Federal Reserve Bank lowered the target rate a '%-point on September 18. With $5 million in our portfolio maturing in October, we are filling maturity gaps in the ladder as well as methodically purchasing 5- year maturities. Investment Committee review: , , Finance Director: ,.. Date ?... i City Manager: Date ID i I / i ' fir ' 9 .'N '' M t7 FINANCE Committee Review of Investment Rationale Date: October 17, 2019 Investment # 2019-1533 is a 5-year Federal Agricultural Mortgage Corp (FAMCA Farmer Mac), face value $1,000,000, maturing June 5, 2024, 2.15% coupon purchased at 102.2900 to yield 1.634%. This trade settles October 18, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment is the fifth of five to replace two ($3,139,000 2.01% and$2, 160,000 2.48%) Refcorps that matured October 15, 2019. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of 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 1.63%. This investment is 44 basis points under LGIP, seeking to protect yield in an eroding yield I uncertain environment. Comparable yields are: LGIP current 30-day yield 2.0726% www.secureaccess.wa.gov 5-year Treasury 1.5700% US Treasury Callability. This investment is a non-callable (bullet). Diversification. This purchase brings this issuer to 3.9% 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 1.59, the 2-year at 1.58, the 3-year at 1.57 and the 5-year at 1.57. The Federal Reserve Bank lowered the target rate a 'A-point on September 18. With $5 million in our portfolio maturing in October, we are filling maturity gaps in the ladder as well as methodically purchasing 5- year maturities. Investment Committee review: Finance Director: Date r.2 Jf sF CityMana r: Date l`� 9 L� 10 ifr,,,-,.",.. 1.1..: \ Y r FINANCE Committee Review of Investment Rationale Date: October 21, 2019 Investment # 2019-1534 is a 1-year Treasury (T), face value $1,000,000, maturing November 30, 2020, 2.750% coupon purchased at 101.223 to yield 1.630%. This trade settles October 22, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment replaces a $1,000,000 2.30% FNMA medium term note being called October 30, 2019. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of the US Treasury, that carries an explicit Federal guarantee, equivalent to Aaa/AA+ rating by Moody's and S&P. Yield. Yield is 1.630%. This investment is 41 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.0449% www.secureaccess.wa.gov 1-year Treasury 1.5900% Treasury.gov Callability. This is a non-callable investment. Diversification. This purchase bring this issuer to 2.57% 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 1.59, the 2-year at 1.62 and the 5-year at 1.61. The Federal Reserve Bank just executed a %-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: , 7 - r :1::: ::::t0. e Date tp,a`D-, LC( 11 y �r FINANCE Committee Review of Investment Rationale Date: October 21, 2019 Investment# 2019-1535 is a 4.75-year FHLB (Federal Home Loan Bank), face value $1,000,000, maturing July 24, 2024, 1.850% coupon purchased at 100.000 to yield 1.850%. This trade settles October 24, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment replaces a $1,000,000 currently held on deposit in the Washington State Treasurer's Local Government Investment Pool (LGIP). Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million, US Bank checking balance was $4,169,530, Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target minimum is $3,000,000. Safety: This purchase is a debt issue of a government—sponsored enterprise (GSE), that carries an explicit Federal guarantee, equivalent to Aaa/AA+ rating by Moody's and S&P. Yield. Yield is 1,850%. This investment is 19 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.0449% www.secureaccess.wa.gov 5-year Treasury 1.6100% Treasury.gov Callability. This investment is callable one time on 7/24/2020. Diversification, This purchase bring this issuer to 9.0% 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 1.59, the 2-year at 1.62 and the 5-year at 1.61. 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 Z r f City Manager: Date 0 l U9 I 12 1,0":\ FINANCE Committee Review of Investment Rationale Date: October 25, 2019 Investment # 2019-1536 is a 5-year FHLMC (Federal Home Loan Mortgage Corp I Freddie Mac), face value $1,000,000, maturing October 28, 2024, 1.875% coupon purchased at 100.000 to yield 1.875%. This trade settles October 28, 2019 with Great Pacific Securities, US Bank Safekeeping. This investment replaces $1,000,000 currently held on deposit in the Washington State Treasurer's Local Government Investment Pool (LGIP), reducing the city's exposure to variable interest returns from market fluctuation. Liquidity: At September 30 month-end, Key Bank checking account balance was $8,738,620, target is $3 Million. US Bank checking balance was $4,169,530. Current invested yield segment of portfolio is now $57,483,000; target is $60,000,000 for Treasuries, Corporates and Agencies. Current LGIP balance is $20,687,638; target Safety:minimum T h i s purchase$3,O 00,O 00i a debt issue of a government—sponsored enterprise (GSE), that carries an explicit Federal guarantee, equivalent to Aaa/AA+ rating by Moody's and S&P. Yield. Yield is 1.875%. This investment is 17 basis points under LGIP, seeking to protect yield in an eroding yield / uncertain environment. Comparable yields are: LGIP current 30-day yield 2.0449% www.secureaccess.wa.gov 5-year Treasury 1.6100% Treasury.gov Callability. This investment is callable one time on 10/28/2020. Diversification. This purchase bring this issuer to 13.9°/o 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 1.59, the 2-year at 1.62 and the 5-year at 1.61. 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: Date City Manager. Date