HomeMy WebLinkAboutInvestment Reports - March 2009 �ity ot'Falm �esert
C�ty and;Redevelopm�nt A�ency Portfe�lios
C4MPL���tGE ANALYSIS'A{��t�i�tE�TNIENT REPC3RT'
March�t109
Paul S. Gibson, C.C.M.T., Treasurer
Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer
Treasurer's Commentary
The Federal Open Market Committee("FOMC ")will meet next on April 28-29. No action is expected. The FOMC is
focused on stabilizing the housing market, and avoiding a prolonged period of deflation that would be difficult to break. To
that end, the FOMC has committed to buy$300 billion of long-term U.S. Treasuries in an effort to lower long-term interest
rates, and stimulate a home refinancing wave.
Nobel Prizing-winning economist Paul Krugman has noted that despite the Obama Administration's recent show of
optimism, things are still getting worse. Industrial production has hit a 10-year low; housing starts are extremely weak;
foreclosures are surging again; commercial real estate continues to deteriorate; and credit card losses continue to mount.
The most that can be said is that there are scattered signs that things are getting worse more slowly. Krugman expects
unemployment to keep rising through 2010. In "V-shaped" economic recoveries, employment comes roaring back due to
pent-up demand. Krugman believes that a "V-shaped" recovery is unlikely due to the amount of debt that has built up.
In the corporate sector, it appears increasingly likely that General Motors and Chrysler will be compelled to file bankruptcy,
due to insufficient concessions from the UAW and the bondholders. General Electric and Berkshire Hathaway recently had
;heir credit ratings downgraded from "AAA"to"AA". The largest U.S. commercial banks appear headed for"A"credit
ratings.
��zs ��� c.c.�r
- City Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
Mar-09 FEB-09 JAN-09 DEC-08 NOV-08 OCT-08
CITY
Month-End Book Value"""' $ 216,674 $ 219,469 $ 212,738 $ 199,053 $ 213,607 $ 217,630
Month-End Market Value*"' $ 216,589 $ 218,243 $ 213,002 $ 199,922 $ 213,168 $ 216,626
Paper Gain(Loss) $ (85) $ (1,226) $ 264 $ 869 $ (439) $ (1,004)
Prior Year Book Variance $ (15,800) $ (7,452) $ (18,677) $ (38,071) $ (27,138) $ (26,483)
Interest Earnings $ 460 $ 443 $ 430 $ 471 $ 529 $ 575
Yield-To-Maturity 2.43% 2.34% 2.55°/a 2.87% 3.04% 3.27%
Weighted Maturity(Days) 324 419 454 490 463 470
Effective Duration 0.36 0.42 0.47 0.54 0.53 0.55
RDA
Month-End Book Value"''" $ 268,377 $ 270,416 $ 281,273 $ 251,852 $ 244,674 $ 245,100
Month-End Market Value*"' $ 269,503 $ 271,497 $ 282,566 $ 253,288 $ 245,564 $ 245,429
Paper Gain(Loss) $ 1,126 $ 1,081 $ 1,293 $ 1,436 $ 890 $ 329
Prior Year Book Variance $ (7,168) $ (9,283) $ (4,674) $ 877 $ (5,516) $ (5,663)
Interest Earnings $ 259,174 $ 283 $ 268 $ 287 $ 304 $ 325
Yield-To-Maturity 1.07% 1.29% 1.25% 1.40% 1.51% 1.60%
Weighted Maturity(Days) 205 235 226 256 272 272
Effective Duration 0.17 0.18 0.19 0.24 026 0.28
**` Omits SLGSs.
City of Palm Desert-- Portfolio Characteristics
March 31, 2009
Dollars in Thousands
Aqeinp Interval Market Value
< 1M $ 103,246 'General Fund Ageingl
<2M -
<3M - 100
<6M 10,227 $�
< 1 YR 28,524 = 57
<2YR 31,997 0 60
<3YR 7,449 � 40
<4YR - a° 16 �$
<5YR - 20 0 0 6 4 0 0 0
>5YR - �
Total: $ 181,443 <1 M <2M <3M <6M < < < < < >
1YR 2YR 3YR 4YR 5YR 5YR
________..._._�
Ratinqs* Market Value ' Credit Quality
AAA $ 149,801 ', �
AA 14,998 ', Unrated** 71% I
A 16,307 I 14% '
Unrated*` 30,114 '� A
Total: $ 211,220 ' 8% �
Sector Market Value , i�Asset Allocation
MMF $ 32,606 MTNs CAMP
15% 23%
Agencies 25,871
MTNs 31,305
CAMP 38,496 Agencies RDA Loan
RDA Loan 22,655 �2% 11%
G M RA 30,173
GMRA
LAIF 30,114 �', M5 0 14%
CP - I LAIF ,
Total: $ 211,220 ' 14%
Month Citv Yield LAIF Yield Variance ', Performance
Apr08 3.98 3.40 0.58
May 3.88 3.07 0.81 4.4
Jun 3J5 2.89 0.86 I
Jul 3.69 2.88 0.82 3.7
Aug 3.65 2.78 0.87 ' '
Sep 3.70 2.77 0.93 � 3.0 ,
Oct 3.27 2.71 0.56 }
2.3
Nov 3.04 2.57 0.47
Dec 2.87 2.35 0.52 1.6
Jan09 2.55 2.05 0.51 Apr08 May Jun Jul Aug Sep Oct Nov Dec Jan09 Feb Mar
Feb 2.36 1.87 0.50 �
Mar 2.17 1.82 0.35 '� �, ■���� �•;e�� ■s;;�Y� _��� ; ��
" Standard and Poors
*" LAIF, and City Loan to RDA Page 2
City of Palm Desert
Portfolio Holdings
March 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Medium-Term Notes
$ 3,795,000 BANK OF AMERICA 5.38 8/15/11 $ 3,905,233 4.05 93.19 $ 3,536,523 A1 A
$ 3,000,000 BANK OF AMERICA 4.25 10/1/10 $ 3,044,965 3.20 95.25 $ 2,857,602 A1 A
$ 2,035,000 GENERAL ELECTRIC 4.88 10/21/10 $ 2,013,962 5.63 99.40 $ 2,022,861 Aa2 AA+
$ 1,891,000 GENERAL ELECTRIC 6.88 11/15/10 $ 1,923,841 5.65 101.45 $ 1,918,486 Aa2 AA+
$ 2,000,000 GENERAL ELECTRIC 6.13 2/22/11 $ 2,015,063 5.67 101.10 $ 2,022,010 Aa2 AA+
$ 3,965,000 GENERAL ELECTRIC 4.88 10/21/10 $ 4,061,413 3.23 99.40 $ 3,941,349 Aa2 AA+
$ 2,000,000 WACHOVIA 7.80 8/18/10 $ 2,070,450 5.02 99.59 $ 1,991,796 A1 AA
$ 2,000,000 WAL-MART 6.88 8/10/09 $ 2,012,660 4.93 101.87 $ 2,037,348 Aa2 AA
$ 3,000,000 WAL-MART 6.88 8/10/09 $ 3,041,535 2.90 101.87 $ 3,056,022 Aa2 AA
$ 4,000,000 WELLS FARGO BANK 6.38 8/1/11 $ 4,102,617 5.13 98.14 $ 3,925,680 A1 AA
$ 2,000,000 WELLS FARGO BANK 4.63 8/9/10 $ 1,988,578 5.09 98.75 $ 1,974,976 A1 AA
$ 2,020,000 WELLS FARGO BANK 4.20 1/15/10 $ 2,008,567 4.96 100.03 $ 2,020,646 A1 AA
$ 31,706,000 Subtotal $ 32,188,884 4.43 $ 31,305,299
�ederal Agencies--Coupon
$ 3,000,000 FED FARM CREDIT BANK 4.78 5/3/10 $ 3,005,087 4.61 104.00 $ 3,120,000 Aaa AAA
$ 3,000,000 FED FARM CREDIT BANK 4.78 5/3/10 $ 3,005,087 4.61 104.00 $ 3,120,000 Aaa AAA
'$ 3,000,000 FED HOME LOAN BANK 4.38 9/11/09 $ 2,993,990 5.59 101.66 $ 3,049,689 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 3.50 11/3/09 $ 1,973,114 5.96 101.47 $ 2,029,376 Aaa AAA
$ 2,033,000 FED HOME LOAN MTG CORP 4.25 7/15/09 $ 2,029,684 4.87 101.09 $ 2,055,237 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,037,684 4.87 102.16 $ 2,093,183 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 4.13 11/18/09 $ 1,991,377 4.88 101.95 $ 2,039,088 Aaa AAA
$ 2,062,000 FED HOME LOAN MTG CORP 4.13 7/12/10 $ 2,041,855 5.47 104.09 $ 2,146,414 Aaa AAA
$ 2,049,000 FED HOME LOAN MTG CORP 4.00 12/15/09 $ 2,028,756 5.50 102.16 $ 2,093,183 Aaa AAA
$ 2,000,000 FED NATIONAL MTG ASSOC 4.63 10/28/09 $ 1,997,324 4.88 102.03 $ 2,040,626 Aaa AAA
$ 2,000,000 FED NATIONAL MTG ASSOC 4.25 8/15/10 $ 1,968,923 5.47 104.22 $ 2,084,376 Aaa AAA
$ 25,193,000 Subtotal $ 25,072,880 5.13 $ 25,871,171
Local Agency Investment Pool
$ 30,114,246 L.A.I.F. 0.00 4/1/09 $ 30,114,246 1.82 100.00 $ 30,114,246 U U
$ 30,114,246 Subtotal $ 30,114,246 1.82 $ 30,114,246
Local Agency Investment Pool
$ 38,439,226 C.A.M.P. 0.00 4/1/09 $ 38,439,226 0.89 100.00 $ 38,439,226 U AAA
$ 57,162 C.A.M.P. (DESERT WILLOW) 0.00 4/1/09 $ 57,162 0.89 100.00 $ 57,162 U AAA
$ 38,496,388 Subtotal $ 38,496,388 0.89 $ 38,496,388
Money Market Fund
$ 32,603,988 WF TREASURY PLUS 0.00 4/1/09 $ 32,603,988 0.08 100.00 $ 32,603,988 Aaa AAA
$ 32,603,988 Subtotal $ 32,603,988 0.08 $ 32,603,988
"U"= Unrated Page 3
City of Palm Desert
Portfolio Holdings
March 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Government Managed Rate Account
$ 30,173,498 UNION BANK 0.00 4/1/09 $ 30,173,498 1.77 100.00 $ 30,173,498 U U
$ 30,173,498 Subtotal $ 30,173,498 1.77 $ 30,173,498
City of Palm Desert
$ 22,655,000 CITY OF PALM DESERT 0.00 4/1/39 $ 22,655,000 1.82 100.00 $ 22,655,000 U U
$ 22,655,000 Subtotal $ 22,655,000 1.82 $ 22,655,000
Total Investments
$ 210,942,120 $ 211,304,884 2.17 $ 211,219,589
Cash
$ 3,452,438 CITY MAIN CHKG 0.00 4/1/09 $ 3,452,438 0.00 100.00 $ 3,452,438 U U
$ 1,496,980 DESERT WILLOW CHKG 0.00 4/1/09 $ 1,496,980 0.00 100.00 $ 1,496,980 U U
$ 420,003 RECREATIONAL FAC CHKG 0.00 4/1/09 $ 420,003 0.00 100.00 $ 420,003 U U
$ - ART, FOOD&WINE CHKG 0.00 4/1/09 $ - 0.00 100.00 $ - U U
$ - MONTEREY 170 CHKG 0.00 4/1/09 $ - 0.00 100.00 $ - U U
$ 5,369,421 Subtotal $ 5,369,421 $ 5,369,421
Total Investments and Cash
$ 216,311,540 $ 216,674,305 $ 216,589,010
%of Portfolio
Corporate Issuer (Market Value)
BANK OF AMERICA 2.95%
GENERAL ELECTRIC 4.57%
WACHOVIA 0.92%
WAL-MART 2.35%
WELLS FARGO BANK 3.66%
"U"= Unrated Page 4
City of Palm Desert
Portfolio Holdings
March 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
%of Portfolio
Agency issuer (Market Value)
FED FARM CREDIT BANK 2.88%
FED HOME LOAN BANK 2.35%
FED HOME LOAN MTG CORP 4.81%
FED NATIONAL MTG ASSOC 1.90%
"U"= Unrated Page 5
Palm Desert Redevelopment Agency-- Portfolio Characteristics
March 31, 2009
Dollars in Thousands
Aqeinq Interval Market Value portfolio Ageing w/o SLGSs�
< 1 M $ 49,946
<2M -
<3M - 100 .�
<6M 15,995 90
80
< 1YR 15,674 = 70
0 60 50
<2YR 18,647 '0 50
<3YR _ � 40
<4YR _ a° 20 16 16 19
<5YR _ 10 0 0 0 0 0 0
0
> 5YR ' < 1 M <2M <3M <6M < < < < < >
Total: $ 100,262 1YR 2YR 3YR 4YR 5YR 5YR
Quality* Market Value �,� '�,Credit Quality
AAA $ 236,898 ' A �
AA 19,780 0% 89%
A _
Unrated*" 11,740 Unrated'"
Total: $ 268,418 4��° �
7%
Sector Market Value Asset Allocation
MMF $ 166,301
Agencies 30,554 MMF
MTNs 19,780 63%
CAMP 40,043 Agencies
LAIF 11,740 LAIF ��%
CP ' ' 4% CAMP MTNs
Treasuries - I
15% 7%
Total: $ 268,418 ' ,
Month RDA Yield LAIF Yield Variance '�I Performance
Apr08 3.35 3.40 -0.05 '
May 3.14 3.07 0.06 3.6 ---
Jun 3.09 2.89 0.20
Jul 3.08 2.79 0.29 2.9 '�
Aug 3.05 2.78 0.27 = ,
Sep 3.18 2.77 0.41 '� 2'2
d
Oct 1.60 2.71 -1.11 ' �
1.5
Nov 1.51 2.57 -1.06 '
Dec 1.40 2.35 -0.95 ' p,g
Jan09 1.26 2.05 -0.79 Apr08 May Jun Jul Aug Sep Oct Nov Dec Jan09 Feb Mar
Feb 1.29 1.87 -0.58
Mar 1.07 1.82 -0.75 ■LAIFYield ■RDAYield
* Standard and Poors
"" LAIF Page 6
Palm Desert Redevelopment Agency
Portfolio Holdings
March 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Medium-Term Notes
$ 3,000,000 WAL-MART 6.88 8/10/09 $ 3,021,444 4.76 101.87 $ 3,056,022 Aa2 AA
$ 3,000,000 WAL-MART 4.13 7/1/10 $ 3,043,694 2.91 103.14 $ 3,094,155 Aa2 AA
$ 13,625,000 WELLS FARGO BANK 4.20 1/15/10 $ 13,749,359 3.00 100.03 $ 13,629,360 A1 AA
$ 19,625,000 Subtotal $ 19,814,497 3.26 $ 19,779,537
Federal Agencies--Coupon
$ 2,000,000 FED FARM CREDIT BANK 6.45 10/7/09 $ 2,014,666 4.88 102.88 $ 2,057,510 Aaa AAA
$ 2,000,000 FED FARM CREDIT BANK 4.75 8/3/09 $ 1,999,257 4.87 101.47 $ 2,029,376 Aaa AAA
$ 4,900,000 FED FARM CREDIT BANK 4.90 9/22/10 $ 4,917,304 4.65 105.38 $ 5,163,375 Aaa AAA
$ 4,500,000 FED HOME LOAN BANK 4.38 9/11/09 $ 4,490,985 5.59 101.66 $ 4,574,534 Aaa AAA
$ 2,005,000 FED HOME LOAN BANK 3.88 7/24/09 $ 1,999,190 4.89 101.03 $ 2,025,678 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,977,553 5.49 106.59 $ 2,131,876 Aaa AAA
$ 2,000,000 FED HOME LOAN BANK 4.88 3/11/11 $ 1,977,254 5.50 106.59 $ 2,131,876 Aaa AAA
$ 2,000,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 2,034,213 5.54 107.72 $ 2,154,376 Aaa AAA
_$ 3,734,000 FED HOME LOAN MTG CORP 6.88 9/15/10 $ 3,797,992 5.54 107.72 $ 4,022,220 Aaa AAA
$ 4,155,000 FED NATIONAL MTG ASSOC 6.63 9/15/09 $ 4,184,727 4.89 102.59 $ 4,262,772 Aaa AAA
$ 29,294,000 Subtotal $ 29,393,142 5.16 $ 30,553,592
Local Government Investment Pool
$ 11,717,956 L.A.I.F. 0.00 4/1/09 $ 11,717,956 1.82 100.00 $ 11,717,956 U U
$ 21,791 L.A.I.F.(HOUSING) 0.00 4/1/09 $ 21,791 1.82 100.00 $ 21,791 U U
$ 11,739,747 Subtotal $ 11,739,747 1.82 $ 11,739,747
Local Government Invesment Pool
$ 37,939,431 C.A.M.P. 0.00 4/1/09 $ 37,939,431 0.89 100.00 $ 37,939,431 U AAA
$ 2,103,778 C.A.M.P. (HOUSING) 0.00 4/1/09 $ 2,103,778 0.89 100.00 $ 2,103,778 U AAA
$ 40,043,208 Subtotal $ 40,043,208 0.89 $ 40,043,208
Money Market Fund
$ 166,302,400 WF TREASURY PLUS 0.00 4/1/09 $ 166,302,400 0.08 100.00 $ 166,302,400 Aaa AAA
$ 166,302,400 Subtotal $ 166,302,400 0.08 $ 166,302,400
Total Investments
$ 267,004,356 $ 267,292,994 1.07 $ 268,418,485
Cash
$ 685,375 HOUSING AUTH CHKG 0.00 4/1/09 $ 685,375 0.00 100.00 $ 685,375 U U
$ 398,768 HOUSING AUTH TRUST 0.00 4/1/09 $ 398,768 0.00 100.00 $ 398,768 U U
$ 1,084,143 Subtotal $ 7,084,143 $ 1,084,143
"U"= Unrated Page 7
Palm Desert Redevelopment Agency
Portfolio Holdings
March 31, 2009
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's SSP
Total Investments and Cash
$ 268,088,499 $ 268,377,137 $ 269,502,628
%of Portfolio
Corporate Issuer (Market Value)
WAL-MART 2.28%
WELLS FARGO BANK 5.06°/a
%of Portfolio
Agency Issuer (Market Value)
FED FARM CREDIT BANK 3.43%
FED HOME LOAN BANK 4.03°/a
FED HOME LOAN MTG CORP 2.29%
FED NATIONAL MTG ASSOC 1.58%
"U"= Unrated Page 8
STATEMENT OF COMPLIANCE
The investment portfolios of the City of Palm Desert("City")and the Palm Desert Redevelopment Agency("RDA")are
governed by federal,state, and local law. The City Treasurer's"Statement of Investment Policy"is more restrictive than the
California Government Code. The Palm Desert Audit, Investment, and Finance Committee and the Palm Desert City
Council review the Statement of Investment Policy annually.
For the month ended March 31,2009,the City and the RDA investment portfolios were in compliance with all applicable
federal, state, and local laws and regulations. The City Treasury continued to pursue conservative and prudent investment
strategies, based upon the stated objectives of safety, liquidity,and yield(in order of priority).
Barring unforeseen events,the City Treasury should have sufficient cash to finance the operations of the City of Palm Desert
and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either the City or the RDA
portfolio could be liquidated in order to meet any significant, unexpected cash requirements.
Bloomberg L.P. and Interactive Data Corporation provided the data and the analytical tools that were used to calculate the
market value of all securities in the City and the RDA investment portfolios. State and Local Government Series securities
are held in escrow accounts, and are therefore not included in this report as assets. All balances are bank balances.
Respectfully Submitted on April 28, 2009,
��s ��� c,c.,y r �
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
• California Government Code City Investment Policy
CA Govt Maximum Maximum Quality Maximum Maximum Quality %of City %of RDA
Code Investment Category Maturity Limit S&P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio
53601(a) Palm Desert Bonds 5 Years No Limit Not Authorized(1)
53632(c) Savin s Accounts No Limit No Limit No Limit No Limit 14.3% 0.0%
53601(b) U.S.Treasuries 5 Years No Limit 5 Years No Limit 0.0% 0.0%
53601(c) CA State Debt 5 Years No Limit Not Authorized
53601(d) CA Local Agency Debt 5 Years No Limit NotAuthorized
53601(e) Federal Agencies 5 Years No Limit 5 Years 30% 6% 11.9% 11.0%
53601 Bankers's Acceptances 180 Days 40% 180 Days 40% A-1 &P-1 - -
53601(g) Commercial Paper 270 Days 25% A-1+or P-1 270 Days 25% A-1+or P-1 0.0% 0.0%
53601(h) Negotiable CDs 5 Years 30% 5 Years 30% AA-or Aa3 - -
53601(i) Repos 1 Year No Limit 30 Days 20% AAA&Aaa - -
53601(i) Reverse Repos 92 Days 20% Not Authorized
53601(j) Medium-Term Notes 5 Years 30% A 5 Years 30% A 15.2% 7.4%
53601(k Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) AAA&Aaa 15.4% 62.2%
53601(I) Trusf Indenture Debt NotAuthorized
53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized
53601(k) Local Government AAA&Aaa AAA&Aaa
Investment Pools 90 Days 20% or Advisor 90 Days 20%(2) or Advisor 18.2% 15.0%
53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized
Securities AA(Security
16429.1(b) LAIF No Limit No Limit 14.3% 4.4%
(1) The City loan to RDA,which is not a bond, has been approved by the Palm Desert City Council. 89.3% 100.0%
� (2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds.
" Certified California Municipal Treasurer Page 9