PRODUCTS
INVESTMENT AGREEMENTS/GIC’S
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Obligation of rated counterparty to pay agreed upon rate and return funds at agreed upon times
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Usually fully flexible draws, fixed rate & downgrade protection
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Highest yield
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Not marked to market
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No ongoing maintenance needed
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All fees paid at closing
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Fixed and variable rates
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Not subject to being marked to market
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Can accept future deposits
FLEXIBLE REPURCHASE AGREEMENTS
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Can be viewed as an investment agreement backed by Treasuries and agency securities.
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Usually fully flexible draws & downgrade protection
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Same features as an investment agreement with U.S. Treasury and agency securities to enhance repurchase agreement provider credit
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Flexible draws
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Fixed and variable rates
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Not subject to being marked to market
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Can accept future deposits
LADDERED
PORTFOLIOS
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Purchase of a portfolio of securities structured to provide funds on or before the date funds will be needed
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Easy to obtain
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Simple to monitor
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If only treasuries then no counterparty risk, if agencies are included minimal counterparty risk
DEFEASANSE EXCROWS
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Purchase of a portfolio of securities structured to provide funds on or before the date funds will be needed
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Easy to obtain, no oversight needed
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Traditional and crossover refundings
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