The purpose of the policy is to provide specific
guidelines regarding the management of the City of
� the preservation of capital;
� the maintenance of liquidity sufficient to meet on going financial requirements, and
� maximization of return on investment.�
� Bonds � evidence of indebtedness carrying a fixed term to maturity of one year or longer, but not including mortgages.
� Money Market Securities � evidence of indebtedness carrying a fixed term to maturity of 364 days or less.
� Bond Portfolio � represents all bonds held by the City.
� Money Market Portfolio � represents all money market securities held by the City.
� Bond Rating Service � a corporation whose primary business mandate is to analyze the audit-worthiness of debt securities issued by all levels of government and corporations and make recommendations as to the risk level of such debt.
Rating categories are those issued by the Dominion Bond Rating Service� (DBRS).
Money Market Ratings
� R-1 High � highest credit quality, unquestioned ability to repay assessed liabilities as they fall due.
� R-1 Middle � superior credit quality, above average strength in key areas of consideration for debt protection.
� R-1 Low � satisfactory credit quality, considerations for debt repayment still respectable.
� AAA � bonds rated AAA are of the highest credit quality with exceptionally strong protection for the timely repayment of principal and interest.
� AA � bonds rated AA are of superior credit quality and protection of interest and principal is considered high, they differ from bonds rated AAA only to a small degree.
� A � bonds rated A are of satisfactory credit quality as protection of interest and principal is still substantial; the degree of strength is less than AA rated entities.
The following securities are approved for purchase:
Money Market Securities
� Obligations of the Government of Canada or of a crown corporation guaranteed as to payment of principal and interest by the Government of Canada.
Obligations of a
� A chartered bank, credit union or trust company.
� Obligations of the Government of Canada or of an agency of the Government of Canada which carries the guarantee of the government;
Obligations of a
Obligations of a municipal government, or school division in
� Obligations of other Canadian municipalities, provided that the obligations to be purchased are assigned a DBRA credit rating of �A� or higher.
The investment portfolio will be structured with the objective of attaining a rate of return throughout budget and economic cycles commensurate with the City�s investment risk constraints and the cash flow parameters for the City as a whole.
The term structure of each security held in the Bond Portfolio shall not exceed 10 years.
The City Treasurer � is responsible for developing and maintaining investment procedures that ensure uniformity, compliance and control of investment activities.
Adopted by resolution of Council,� January 14,2021