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Presentation, discussion, and possible action on Resolution No. 25-019 regarding the annual approval of the Department’s Interest Rate Risk Management Policy
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RECOMMENDED ACTION
Adopt attached resolution.
BACKGROUND
The Department adopted an Interest Rate Risk Management Policy (formerly the Swap Policy) on September 9, 2004, to establish guidelines for the use and administration of interest rate management agreements, including but not limited to, interest rate swaps, caps, collars, and floors acquired in connection with the issuance of debt obligations. The Swap Policy is reviewed and approved annually. It underwent substantial changes in 2009, and had minor edits since.
Modifications for 2025 clarify the Department’s ability to manage interest rate risk related to assets (mortgage loans and pipeline risk), in addition to liabilities (issuance of debt obligations). The proposed Interest Rate Risk Management Policy, blacklined against the prior Swap policy, contains these edits, and updates pursuant to state law.
Staff, in conjunction with the Department’s Swap Advisor and Bond Counsel, has reviewed the proposed Interest Rate Risk Management Policy and recommends approval and adoption of Resolution 25-019.