5.2 TREASURY MANAGEMENT PRACTICE (TMP1) – CREDIT AND COUNTERPARTY RISK MANAGEMENT OPTION 1 SPECIFIED INVESTMENTS: (please select from table below) (All such investments will be sterling denominated, with maturities up to maximum of 1 year, meeting the minimum ‘high’ rating criteria where applicable) * Minimum ‘High’ Credit Criteria Use Debt Management Agency Deposit Facility -- In-house Term deposits – local authorities -- In-house Term deposits – banks and building societies Green In-house Term deposits with nationalised banks and banks and building societies * Minimum Credit Criteria Use *** Max % of total investments Max. maturity period UK part nationalised banks Blue In-house £15m 5 yrs Collateralised deposit UK sovereign rating UK Government Gilts UK sovereign rating In-house buy and hold issued by multilateral development banks AA- In-house buy and hold Bond issuance issued by a financial institution which is explicitly guaranteed by the UK Government e.g. National Rail UK sovereign rating In-house buy and hold Sovereign bond issues (other than the UK govt) AA- buy and hold Corporate Bonds – secured A In-house Corporate – unsecured AA- In-house Certificates of deposit issued by and building societies A- In-house Treasury Bills UK sovereign rating In house Instant Access Deposit Accounts AA In-house Collective Investment Schemes structured as Open Ended Investment Companies (OEICs): -
Term Deposits with Banks and Building Societies which meet the Specified Investments criteria Purple In- house and Fund Manager 15% 2 years Term Deposits with Banks and Building Societies which fall in the Non- Specified Investments criteria Green In- house and Fund Manager 15% 100 days Term Deposits with Local Authorities - In- house and Fund Manager 10% 2 years Gilts UK Sovereign rating In- house and Fund Manager 25% 10 years Bonds issued by multilateral development banks Short-term F1, Long-term AA, Viability BB+ In- house and Fund Manager 15% 5 years Money Market Funds (MMF) operating on Constant Net Asset Value (CNAV) basis if not credit rated – up to value of 10% of total investment portfolio per MMF Short-term F1, Long-term AA+, Viability BB In- house and Fund Manager 20% - Enhanced Money Market Funds - up to value of 10% of total investment portfolio per MMF F1, Long-term AA+, Viability BB In- and Fund Manager 40% - Pooled such those investing in sovereign bonds, corporate bonds, property funds, equity funds Short-term F1, Long-term AA-, Viability BB+ In- house and Fund Manager 15% 2 years Investment in Share Capital of a wholly owned and /or subsidiary company of the Council Not applicable In- house Not applicable Not applicable Investments with other organisations** Not applicable In house Not applicable Not applicable ** Investments with other organisations have been included as a non-specified investment category for 2017/18. This would include investment opportunities with small and medium sized enterprises (SMEs) and other businesses and entities across the UK. Because of the higher perceived credit risk of SMEs, such investments may provide considerably higher rates of return. An external credit assessment will be undertaken and advice from Capita will be sought (where available) before any investment decision is made. Delegated authority is granted to the Finance Officer, in consultation with the Lead Member for Financial Management and the Chairman of Accounts, Audit and Risk Committee, to amend the lending criteria and counterparty limits detailed above as