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result, we can meet any of the county’s short-term needs. Our bond portfolio has little exposure to US Treasuries, and our remaining bond holdings will continue paying interest despite any downgrade.

As an advisory to local government in Will County, the following is our specific investment strategy through the conclusion of the deficit negotiation. It applies if the federal governments defaults, or if it does not default but two or more credit agencies downgrade the United States’ credit rating.

We intend to hold our bond positions unless the market price of those bonds rise and we can earn a premium from selling them before their date of maturity. We will convert to cash any “called” bond during a default. If the federal government defaults on its debt, we will either invest new money in bank certificates, CDARs, or hold as cash. We will not purchase new treasury, agency, municipal bonds or short-term corporate obligations during a federal default. In the event the interest rates for bank repurchase agreements increase after a default, we will consider short-term repurchase agreements of 90 days or shorter maturity.

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