§ 3.25.060. Collateralization.

A.

Payment of principal and interest due upon maturity of certificates of deposit, repurchase agreements or other deposits in a bank or savings and loan association in excess of federal insurance must be collaterized by any combination of the following unless otherwise provided:

1.

Obligations of or obligations insured or guaranteed by the United States or an agency or instrumentality of the United States; and

2.

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 at least AA or its equivalent by a nationally recognized rating service.

No security pledged as collateral for a city investment shall mature longer than three years after the date of the city's investment transaction.

B.

At all times during the term of the city's investment in a certificate of deposit, repurchase agreement or other deposit the bank or savings and loan association, with which city moneys are so invested shall pledge and maintain collateral in accordance with this chapter, which has a then current market value at least equal to the following percentage (margin requirement) of the total amount of principal and interest, which will be due and owing to the city upon maturity. The margin requirements may be higher as determined by the city manager or director of budget/finance if it is determined that such action is reasonably necessary to protect the security of city investments.

Collateral Type	Margin Requirements
U.S. Treasury Securities:
Maturity of one year or less	102%
Maturity of one to three years	105%
Actively traded U.S. Government agency or instrumentality securities:
Maturity of one year or less	103%
Maturity between one year and three years	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	102%
Maturity date between one year and three years	107%

 

(Ord. 95-4 (part), 1995).