TRANSMITTAL LETTER FOR BOARD MEETING OF NOVEMBER 1, 2012
COMMITTEE ON FINANCE
Mr. David St. Pierre, Executive Director
Title
Report on investments purchased during August 2012
Body
Dear Sir:
Attached is a report indicating the investments made in securities and overnight money market funds for the various District Funds during the month of August 2012.
During the month, 31 individual investments were made with a total par value of $211,300,000.00 at an average annual yield of 0.955%. The interest income to maturity of these investments is approximately $1.4 million. Investments made included 28 items for a period of greater than 30 days with a par value of $190,300,000.00, invested at an average yield of 1.032%, and 3 items for less than 30 days (average 20 days) with a par value of $21,000,000.00 at an average yield of 0.261%.
Additionally, 18 investments were made in Money Market Funds during the month, with a par value of $98,673,082.95 at an average annual yield of 0.210%.
The fixed income market continues to be challenged by exceptionally low investment yields. There is very little risk premium to be earned by extending maturities for uncollateralized investments such as commercial paper beyond a 60-day period. As such, investments continue to be made to meet the District's liquidity demands for debt service, payroll, and other operating expenditures, based upon the best yield offered on the date of investment as well as the diversification requirements of the District's Investment Policy. See the last page of the attachment for the average market interest rates offered for purchases during the month. Commercial Paper and High Yield Savings continue to provide the highest yields for short-term investment requirements.
Respectfully Submitted, Mary Ann Boyle, Treasurer, MAB:st
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