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Report on the Department's 3rd Quarter Investment Report related to funds held under Bond Trust Indentures
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BACKGROUND
Funds held under Bond Trust Indentures are governed by the terms of each respective indenture and are managed by the trustee, who controls permitted investments and compliance requirements. Accordingly, these funds are excluded from the Department's Investment Policy.
While not required under the Public Funds Investment Act (PFIA), this report is provided for transparency into investment balances and activity, portfolio composition and changes during the quarter, and financial position of each indenture, including parity (asset-to-liability coverage).
The primary objective of these investments is to generate sufficient cash flow to meet debt service requirements and ultimately retire the associated bond obligations.
Portfolio Overview
Total indenture-related investments decreased to $4.47 billion (carrying value), a net decrease of approximately $12.5 million for the quarter. The increase in percentage of MBS is attributable to the pooling of mortgage loans under the RMRB indenture, as well as the reinvestment of mortgage repayments across all indentures
Portfolio Investment Composition
Investment Type Beginning of Quarter End of Quarter
Mortgage-Backed Securities (MBS) 85% 88%
Repurchase Agreements (Cash Equivalents) 9% 5%
Treasury-Backed Mutual Funds 2% 2%
Guaranteed Income Contracts/Agreements 1% %
Treasury Notes/Bonds/SLGs 3% 3%
Total 100% 100%
Quarterly Activity
Portfolio activity reflects continued production within the RMRB and Multifamily indentures, along with ongoing cash flow from the Single Family (SFMRB) indenture. MBS purchases totaled $165.5 million, with MBS paydowns and maturities of $41.4 million.
Repurchase agreements decreased due to the origination of mortgage loans and the temporary reinvestment of mortgage repayments unt...
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