B2B with a Twist Publication - Work • Stay • Play October Edition Work Stay Play Summer 2017-18 Edition | Page 7

B2B - Keeping you in the know
Council’s investment portfolio is
sound and secure
Central Coast Council has
moved to assure ratepayers its
investment portfolio is on track
to deliver sound returns for the
community.
As at August 2017 43.84% of Council’s investment portfolio
was held in the BBB credit rating Category compared to its
own guideline of 40%.
The financial institutions issuing fixed income investments
and bonds are considered investment grade (IG) if its credit
rating is BBB or higher by Standard and Poor (S&P). Generally
the financial institutions are assessed by the rating agency
as having adequate capacity to meet financial commitments
and repayment of the invested funds.
There was a downgrading of some bank’s credit rating in
May 2017 by S&P, which in turn has downgraded the rating
of some of Council’s investments but Council has confirmed
in a public report that this will be rebalanced favourably by
the end of the month. Council has reported the rebalancing
of the investment portfolio in each of its monthly investment
reports since the May 2017 report presented at the Ordinary
Meeting held on 28 June 2017.
Council intends to hold these term deposits until they
mature and as such the value of these term deposits are not
impacted by this rating change.
Council Chief Financial Officer, Ms Vivienne Louie, said
Council’s investment portfolio is in accordance with the
Ministerial Order and will be within Council’s investment
guidelines by October 2017. Over 50% investments are held
with AA financial institutions.
“Council is not concerned the investment portfolio is
currently predominantly in the BBB Category as we believe
those financial institutions are safe to hold our investments,”
Ms Louie said.
“At certain times of the year Council may have more cash
than we require to meet our obligations so we invest the
additional funds to obtain the best return for our community.
“Staff always review the investment portfolio to ensure any
new investments proposed are in accordance with the
Ministerial Investment Order and Council’s Investment Policy.
“We review cre dit ratings of financial institutions who are
taking investments, review the interest rates offered for the
maturity dates required and the amount of our investment
portfolio already held with each financial institution.”
Before entering into any investment transaction with a new
institution there will be a diligent review of the creditworthiness
of that institution. The Chief Executive Officer or his/her
delegate must form its own opinion of the risk attached to
an institution and not merely rely on published credit ratings.
Council will continue to monitor the portfolio and manage
investments taking into consideration credit ratings of
financial institutions, interest rates offered for the maturity
dates required and the amount of our investment portfolio
already held with each financial institution.
Council’s investment policy requires Council staff to manage
the investment portfolio considering not just the credit rating
of the financial institutions taking investments but also how
much of Council’s investment portfolio is concentrated in
each financial institution.
“We don’t want to put all our eggs in one basket which is why
we review credit ratings with the amounts invested with each
financial institution,” Ms Louie added.
Council’s investment portfolio is reported monthly to the
next available ordinary Council meeting. The September
investment report will be presented at Monday’s Council
meeting in the Gosford Chambers. Council’s investment
policy going forward will be reported to the November
meeting.
Media Contact: Alison Ayres
[phone]
4397 1300
maximiliansonthewaterfront.com.au
200 Main Road, Toukley
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“Our investment portfolio is structured on rolling maturity
dates to ensure Council has sufficient funds to deliver the
Operational Plan.
“Our Operational Plan is our contract with our community
and we must deliver.
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