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 (02) 4304 7595 4397 1300 maximiliansonthewaterfront.com.au 200 Main Road, Toukley Follow us “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. 7