7.16.050 Collateralization.
A. If Borough moneys are invested in certificates of deposit or other deposits in a bank, credit union, or savings and loan association, the entire amount of principal and interest which will be payable to the Borough upon maturity of the investment must be collateralized by any combination of the following, unless otherwise provided:
1. Insurance issued by the Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), or Federal Savings and Loan Insurance Corporation (FSLIC);
3. Obligations guaranteed by the U.S. government or its agencies and instrumentalities;
4. Obligations of the state of Alaska or its political subdivisions which are secured by the full faith, credit and taxing power thereof, and which are rated A or higher by Moody’s Investors Service, Inc., or Standard and Poor’s Corporation.
No security pledged as collateral for a Borough investment shall mature more than five years after the date of the Borough’s investment transaction.
B. At all times during the term of the Borough’s investment in a certificate of deposit or other deposit, the bank, credit union, or savings and loan association with which Borough moneys are so invested shall pledge and maintain collateral, in accordance with this chapter and the administrative procedures adopted under this chapter, which has a then-current market value equal to the following percentage (margin requirement) of the total amount of principal and interest which will be due and owing to the Borough at the maturity date of such certificate of deposit or other deposit. At all times during the term of such investments the collateral pledged as security for each investment shall have a market value at least equal to the applicable margin requirement, which requirement shall vary with the type of instrument pledged as security, according to the schedule set out in this subsection. The margin requirements contained herein are minimums. The Mayor may require higher margins if they determine that such action is reasonably necessary to protect the security of Borough investments.
|
Collateral Type |
Margin Requirement |
|---|---|
|
Maturity date one year or less from the date of the Borough’s investment transaction |
102% |
|
Maturity date between one and five years from the date of the Borough’s investment transaction |
105% |
|
Actively traded U.S. government agency or instrumentality securities, except mortgage pass-through securities |
|
|
Maturity date one year or less from the date of the Borough’s investment transaction |
103% |
|
Maturity date between one and five years from the date of the Borough’s investment transaction |
107% |
|
Government National Mortgage Association mortgage pass-through securities |
120% |
|
All other U.S. government agency or instrumentality mortgage pass-through securities, and U.S. government agency or instrumentality securities which are not actively traded |
125% |
|
Obligations of the state of Alaska and its political subdivisions secured by the full faith, credit and taxing power thereof |
|
|
Maturity date, one year or less from the date of the Borough’s investment transaction |
102% |
|
Maturity date between one and five years from the date of the Borough’s investment transaction |
107% |
|
FDIC, NCUA, and FSLIC insurance |
100% |
(Ord. 2019-09 § 2, 2019; Ord. 99-007 § 4, 1999; Ord. 87-069 § 4, 1988. 2004 Code § 3.04.040.)