Agenda - Council - 10/22/1996 - Laserfiche WebLink

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I I I I I I I I I I I I I I I i I I I City of Ramsey Investment Policy senior Unsecured debt of the issuer is rated, or obligations backed by letters of credit of the issuer if forming the primary basis of a rating of such obligations would be rated in one of the ihree highest rating categories of Standard & Poor's Corporation, Moody's Investors Service, Inc., or similar nationally recognized rating agency, or (2) in the case of short-term investment contracts, the short-term unsecured debt of the issuer or guarantor is rated, 'or obligations backed by letters of credit of the issuer or guarantor if forming the primary basis of a rating of such obligations would be rated, in the highest two rating categories of Standard and Poor's Corporation, Moody's Investors Service, Inc., or similar nationally recognized rating agency. The fund may also be used to purchase any obligations, whether general or special, of an issue which is payable from the fund, at such price, which may include a premium, as shall be .agreed to by the holder, or may be used to redeem any obligation of such an issued pdor to maturity in accordance with its terms. The securities representing any such investment may be sold or hypothecated by the municipality at any time, but the money so received remains a part of the fund until used for the purpose for which the fund was created. Subd. 4. Any obligation held in the debt service fund from which it is payable may be canceled at any time unless otherwise provided in a resolution or other instrument securing obligations payable from the fund. Stlbd. 5. For the purposes of this section, "high risk mortgage-backed securities" are: (a) interest-only or principal-only mortgage-backed securities; and (b) any mortgage derivative security that: (1) has an expected average life greater than ten years (2) has an expected average life that: (i) will extend by more than four years as the result of an immediate and sustairied parallel shift in the yield curve of plus 300 basis points; or (ii) will shorten by more than six years as the result of an immediate and sustairied parallel shift in the yield curve of minus 300 basis points; or (3) will have an estimated change in price of more than 17 percent, as the result of an immediate and sustained parallel shift in the yield curve of plus or minus 300 basis points. Su~d. 6. (a) for the purpose of this subdivision, the term "broker" means a broker-dealer, broker, or agent of a municipality, who transfers, purchases, sells, or obtains securities for, or on behalf of, a municipality. (b) Prior to completing an initial transaction with a broker, a municipality shall provide to the broker a written statement of investment restrictions which shall include a provision th, at all future investments are to be made in accordance with Minnesota Statutes governing the investment of public funds. A broker must acknowledge receipt of the statement of investment restrictions in writing and. agree to handle the municipality's account in accordance with these restrictions, fA municipality may not enter into a transaction with a broker until the broker has provided this written agreement to the municipality. The state auditor shall prepare uniform notification forms which shall be used by the municipalities and the brokers to meet the requirements of this subdivision.