Agenda Item 8L — Torrance City Council, December 17, 2024

Date: December 17, 2024
To: Honorable Mayor and Members of the City Council
From: Tim Goodrich, City Treasurer
By: Jasmine Allen, Deputy City Treasurer | [email protected] Subject: City Treasurer – Accept and File Investment Report for the Month of October 2024.

Expenditure: None.

RECOMMENDATION
Recommendation of the City Treasurer that City Council accept and file the Investment Report for the month of October 2024.

FUNDING

None required.

DISCUSSION

On May 21, 2024, your Honorable Body adopted Resolution No. 2024-24 establishing the City’s 2024 Statement of Investment Policy (Investment Policy). The City’s Investment Policy requires the City Treasurer to report a monthly statement of investment activity.

Monthly Investment Report Summary
The City's investment objectives, in order of priority, shall be: (1) Safety which is investing in the highest quality securities; (2) Liquidity which can be converted into cash and necessary to meet our cash flow disbursement requirements; and (3) Yield w hich is earning a higher yield than the market rate of return.

October 2024 Investment Report
City’s portfolio yielded 4.421% for October, a slight decrease of 6.8 basis points over the previous month. The fiscal year-to-date earnings are $4,673,265.

As of October 31, 2024, the ending balance of total funds was $318,708,243, a decrease of $9,430,221 from the previous month, which included investments of $303,535,073 and cash of $15,173,170. The large decrease was primarily due to payments for CalPERS C ERBT ($6.8M), City Council
December 17, 2024

Page 2 ends

2016 COP ($888K), and to PARS ($1.2M). The funds described in the investment report are distributed amongst our various major fund categories as follows:

For the month of October, California Asset Management Program (CAMP)’s balance was $78.4M, earning a yield of 5.030%. The Local Agency Investment Funds (LAIF)’s yield remains lower, at

4.518%. Staff continue to monitor these rates relative to the cash flow needs of City operations and invest the funds accordingly.

Four new fixed income instruments totaling $33 .7M were purchased during the month, with an average yield of 4.598%. Nine investments totaling $19.6M were matured or called, with an average yield of 4.227%.

The City is in compliance with California Government Code Section 53646 which requires the local agency to report on its ability to meet pooled expenditure requirements for the next six (6) months. Over the next 6 months, cash, cash equivalents (LAIF, CAMP, Sweep Money Market) and projected inflows exceed projected cash outflows by $173.2M.

Investment Committee Members
The Investment Committee members include the City Manager, City Attorney, Finance Director, City Treasurer, and Deputy City Treasurer, as created by your honorable body. The Committee has reviewed the attached investment report (Attachment 1).

ATTACHMENT

1. Monthly Investment Report for October 2024

Fund Category Grand Total
Capital Improvement Fund 23,528,091
Enterprise Funds 116,884,687
Fiduciary Funds 9,715,804
General Fund 26,051,351
Internal Svc - Fleet Services Fund 34,370,600
Internal Svc - OPEB Fund 5,194,842
Internal Svc - Self-Insurance Fund 19,871,016
Nonmajor Governmental Funds 79,096,324
Reconciling Adjustments: 3,995,528
Ending Total Bank Balances as of October 31, 2024 318,708,243 *Reconciling Adjustments include any outstanding checks, in-transit deposits, and any other outstanding transactions that would result in a variance between the ending cash balances of our bank statements and our financial ledgers.

City of Torrance, California
Monthly Investment Portfolio
Report October, 2024
Table of Contents Page
I. Portfolio Report Summary
Table of Contents……………………………………………………………………………….. 1
Summary Notes………………………………………………………………………………….. 2-3
II. Pooled Funds
Portfolio Highlights……………………………………………………………………………… 4
Portfolio Activity Summary………………………………………………………………….. 4 Portfolio Summary…………………………………………………………………………….… 5
Portfolio Monthly Activity Detail…………………………………………………………. 6 Portfolio Performance…………………………………………………………………………. 7
Portfolio Earnings Summary………………………………………………………………… 7
Portfolio Distribution
Maturity Distribution…………………………………………………………………………… 8
Assigned Credit Ratings of Investments……………………………………………….. 9 Federal Agencies Distribution……………………………………………………………… 9 Portfolio Sectors………………………………………………………………………………….. 9
Value of Portfolio per GASB 31..………………………………………………………….. 10 Detailed Reports
Investment Portfolio……………………………………………………………………………. 11-14 IV. Appendix A
Notes to Investment Report ……………………………………………………………… 15-16 V. Appendix B
Glossary …………………………………………………………………………………………… 17-22
Attachment 1
11/19
1 ATTACHMENT 1
City of Torrance, California
Investment Report Summary Notes
For the Month of: October 2024
2024
`
Prepared by the Office of the Treasurer for the Investment Advisory Committee Summary
The City's investment objectives, in order of priority, shall be safety, which is investing in the highest quality securities, liquidity, which can be converted into cash and necessary to meet our cash flow disbursement requirements, and yield, which is earning a higher yield than the market rate of return.

City’s portfolio yielded 4.421% for October, a slight decrease of 6.8 basis points over the previous month. The fiscal year-to-date earnings are $4,673,265.

As of October 31, 2024, the ending balance of total funds was $318,708,243, a decrease of $9,430,221 from the previous month, which included investments of $303,535,073 and cash of $1 5,173,170. The large decrease was primarily due to payments for CalPERS CERBT ($6.8M), 2016 COP ($888K), and to PARS ($1.2M).

For the month of October, California Asset Management Program (CAMP)’s balance was $78.4M, earning a yield of 5. 030%. The Local Agency Investment Funds ( LAIF)’s yield remains lower, at 4.518%. Staff continue to monitor these rates relative to the cash flow needs of City operations and invest the funds accordingly.

Four new fixed income instruments totaling $33M were purchased during the month, with an average yield of 4.598%. Nine investments totaling $19.6M were matured or called, with an average yield of 4.227%.

Purchases:

Maturities/Calls:
$ 328,138,464.17
$ 318,708,242.79
$ (9,430,221.38)
Ending Balance of Total Funds as of October 31, 2024
Difference
Ending Balance of Total Funds as of September 30, 2024
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2 City of Torrance, California
Investment Report Summary Notes
For the Month of: October 2024
2024
`
Prepared by the Office of the Treasurer for the Investment Advisory Committee Liquidity of the Portfolio
❖ A yield curve is typically defined as the difference between the 3-month and 10-year treasury rate. However, the City uses the 1-year and 5-year yield curve, as the City is allowed to purchase investments for up to five years per the City's investment policy. The shape of the 1-year and 5-year yield curve continues to show a decline, which means the 1-year yield is higher than the 5-year. As of October 31, 2024, the 1-year, 3 -year and 5 -year treasury yield s were 4.27%, 4.12% and 4.15%, respectively.
❖ The City is in compliance with California Government Code Section 53646 which requires the local agency to report on its ability to meet pooled expenditure requirements for the next six (6) months. Over the next 6 months, cash, cash equivalents (LAIF , CAMP, Sweep Money Market ) and projected inflows exceed projected cash outflows by $173.2M.

Investment Comparison to Benchmark
As stated above for the month of October, the City's portfolio yielded 4.421%. The 1-year and 2-year U.S. Constant Maturing Treasury (CMT) is at 4.27% and 4.16%, respectively.

The City's portfolio has a current average maturity of 551 days or 1.51 years. $ 15.2
$ 78.4
Money Market Account as of October 31, 2024 $ 22.6
Cash Inflows $ 254.0
Cash Outflows $ 197.0
Projected Cash/Liquidity Balance $ 173.2
Cash Activity/Balances projected over the next 6 months (millions):

Cash Balance as of October 31, 2024
CAMP/LAIF Balance as of October 31, 2024
11/19
3 Investment Report
October 2024
Portfolio Highlights
Purchases/Deposits*
Maturities/Redemptions*
INCOME
*Includes LAIF/CAMP and MMA activity
**Transaction count does not include LAIF/CAMP or MMA activity Fiscal Year to Date
Current Month

MATURITY
$64,236,369.50
Prior Month
$3,448,596.36
$1,142,367.23
434

1.51 $68,747,451.67
Total Volume ($)* # of Transactions**
9 Prior MonthRETURN
City Portfolio YTM
U.S. Treasury Constant Maturity (2 year)
CAMP Monthly Return
Current Month

4.489%

3.660%

5.290%

4.421%

4.160%

5.030%
LAIF Monthly Return 4.518% 4.575%
4 Prior Month

VOLUMES
Current Month
551Days to Maturity
Average Maturity (Years) 1.19
870

4.830%
816Days to Maturity (Prior Year)
$4,673,264.66

4.690%Sweep Money Market Monthly Return
Current Month
$1,148,780.86
11/19
4 Investment Report
October 2024
Portfolio Monthly Activity Detail
Purchases Broker Purchase
Date Description NRSRO
Rating
Maturity
Date Term (YR) Coupon (%) YTM 365 (%) Par Value ($) Book Value ($) 11468 OP 10/28/2024 OMAHA A+ 10/15/2029 5 4.770% 4.770% $10,000,000.00 $9,991,015.11 11469 OP 10/28/2024 PACLIF AA- 8/28/2029 4.8 4.471% 4.471% $10,000,000.00 $10,012,278.79 11470 OP 10/28/2024 PRIMEA AA- 6/12/2029 4.6 4.550% 4.550% $5,000,000.00 $5,136,703.09 11471 OP 10/28/2024 CARGIL A2 6/18/2027 2.6 4.601% 4.601% $8,000,000.00 $8,551,076.16 Average Rate / Totals 4.598% $33,000,000.00 33,691,073.15$ Maturities/
Calls/Sales Broker Purchase Date Description NRSRO
Rating
Maturity/Call/
Sale Date
Days Held/Days
to
Maturity/Sale
Coupon (%) YTM 365 (%) Par Value ($) Book Value ($)
11419 OP 4/5/2023 FFCB AA+ 10/9/2024 1.5 5.336% 5.336% $850,000.00 $850,000.00 11421 OP 4/12/2023 FFCB AA+ 10/9/2024 1.5 5.215% 5.215% $2,000,000.00 $2,000,000.00 11422 OP 4/19/2023 FHLMC AA+ 10/17/2024 1.5 5.539% 5.539% $3,000,000.00 $3,000,000.00 11369 AC 1/25/2022 FHLMC AA+ 10/25/2024 2.8 1.141% 1.141% $2,500,000.00 $2,500,000.00 11406 WB 1/30/2023 FHLMC AA+ 10/26/2024 1.7 5.197% 5.197% $2,000,000.00 $2,000,000.00 11404 WB 1/30/2023 FHLMC AA+ 10/28/2024 1.7 5.248% 5.248% $3,000,000.00 $3,000,000.00 11407 Stifel 1/30/2023 FNMA AA+ 10/28/2024 1.7 4.998% 4.998% $3,000,000.00 $3,000,000.00 11356 MB 11/22/2019 Toyota AA- 10/7/2024 4.9 1.974% 1.974% $3,000,000.00 $3,000,000.00 11415 OP 3/30/2023 CD FDIC 10/30/2024 1.6 5.450% 5.450% $243,000.00 $243,000.00 Annualized Yield / Totals 4.227% $19,593,000.00 $19,593,000.00

Beginning Balance Coupon ( % ) Yield (%) Montly Interest Earned ($)
$41,553,568.58 4.690% 4.690% $180,841.77
Beginning Balance Coupon (%) Yield (%) Quarterly Interest Earned ($)
$11.21 4.518% 4.518% $0.13
Beginning Balance Coupon (%) Yield (%) Monthly Interest Earned ($)
$78,041,829.05 5.030% 5.030% $332,645.18CAMP Pool $0.00 $0.00 $78,374,474.23 LAIF
General
Withdrawals ($)
$0.00
Withdrawals ($)
$0.00
Deposits ($)
US Bank Ending Balance ($)
$22,610,351.10
Ending Balance ($)
$11.34
Ending Balance ($)
Money Market
Deposits ($)
Deposits ($)
$30,030,392.42
Withdrawals ($)
$49,154,451.67
CAMP
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6 Investment Report
October 2024
Portfolio Performance

4.47%
Portfolio Earnings Summary
Notes :

As long as a bond is held to maturity there will be no capital loss or gain to report. (590,884.07)
$942,874.08
Total Capital Gains or Loss (Unrealized)
$5,899,988.57
Adjusted by Premiums/Discounts represents the premium or discount cost involved to secure higher or lower yield securties. The cost of the premium or discount is amoritized down or up respectively to par over the life of the bond until reaching maturity.

By amortizing, the amount of taxable interest is reduced for each year the city owns the bond. This is because the amortized premium or discounts offsets the ordinary income of the coupon payment. *Accrued Interest: Interest that has accumulated between the most recent payment and the sale of a bond or other fixed-income security. At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period that has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semiannually and sells the bond one-quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.)
CD/Coupon/Discount Investments:

Interest Collected
$698,278.28
Plus Accrued Interest* at End of Period
$863,073.37
1,998,832.23
244,595.80
(2,163,627.32)
75,706.00

0.00 75,706.00

0.00 $773,984.28
232,558.37
41,483.15
(29,445.72) (92,064.83) 938,862.78
$5,840,028.29
650,844.35
(590,884.07)
$4,961,125.79
989,444.46
41,483.15
$4,520,549.79
1,998,829.13
(1,618,213.41)
$4,901,165.51
650,844.35
Plus Accrued Interest at End of Period
Total Earnings this Period
Less Accrued Interest* at Beginning of Period
Interest Earned during this Period
Adjusted By Premiums/Discounts
Adjusted by Capital Gains or Losses (Unrealized)
Earnings during Periods
Cash/Checking Accounts:

Less Interest at Beginning of Period
Interest Earned this Period
Total Interest Earned
Total Adjustments from Premium and Discounts
Interest Collected
$1,018,580.08

0.1%

0.4%

0.7%

1.0%

1.3%

1.6%

1.9%

2.2%

2.5%

2.8%

3.1%

3.4%

3.7%

4.0%

4.3%

4.6%

4.9%

5.2%

5.5%
Yield %
Constant Maturity Treasury - 2 Year (Benchmark) LAIF Monthly City Yield 11/19
7 Investment Report
October 2024

4.47%
Maturity Distribution

2.72%

10.21%

14.36%

4.17%

19.08%

21.30%

15.46%

11.77%

18.80%

22.04%

18.00%

13.51%

4.59%

17.00%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%
September October
Duration to Maturity (%)
1 to 30 Days 31 Days to 6 Months 6 Months to 1 Year 1 Year to 2 Years 2 Years to 3 Years 3 Years to 4 Years 4 Years to 5 Years NOTE: SB 564 passed in 1995, effective February 1, 1996, requires that local agencies submit a quarterly report to the legislative body containing detailed information on all securities, investments, and monies of the local agency was eliminated by AB 2853 on September 29, 2004 .

CA GC §53646(b)(3) requires a statement of compliance of the portfolio with the statement of investment policy and a statement of the local agency’s ability to meet the expenditure requirements of the pool for the next six months. We are in compliance with the section. 11/19
8 Investment Report
October 2024
Portfolio Distribution
Federal Agencies Distribution Assigned Credit Ratings of Investments (Total Portfolio) Portfolio Sectors (Book Value)

58.44%

34.91%

6.64%
Federal Farm Credit Bank
Federal Home Loan Bank
Federal Home Loan Mortgage Co
$78,374,474
$8,260,920
$90,186,337
$28,202,630
$75,552,939
$22,610,351
$347,410
-
20,000,000.00
40,000,000.00
60,000,000.00
80,000,000.00
100,000,000.00
CAMP Negotiable CDs Federal Agency
Securities
Treasury Securities Medium-Term
Notes/Corps
Money Market Sweep Municipal Bonds

38.04%

29.65%

22.12%

2.73%

7.46%
AAA/Aaa/AA3
AA+
AA-
FDIC
A-1
11/19
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Par Value Book Value
Maturity
Date
Stated
RateMarket Value
October 31, 2024
Portfolio Details - Investments
Average
BalanceIssuer
Portfolio Management
Deputy Treasurer Monthly Reports
Days to
MaturityS&PCUSIP Investment #
Purchase
Date
Local Agency Investment Funds

4.518Local Agency Invest Fund GEN'L10000 11.34 11.34 4.51807/01/2022 11.34 LAIFSYS10000 1

11.3411.3411.3411.21Subtotal and Average 4.518 1
Money Market Sweep Account

4.690US Bank10001 22,610,351.10 22,610,351.10 4.69007/01/2022 22,610,351.10 A-1316175108 1 22,610,351.1022,610,351.1022,610,351.1041,789,975.57Subtotal and Average 4.690 1 Federal Agency Issues - Coupon

4.120FEDERAL FARM CREDIT BANK11381 13,000,000.00 12,750,143.61 09/15/2027 3.37510/07/2022 12,721,670.00 AA+3133ENL99 1,048

4.322FEDERAL FARM CREDIT BANK11383 10,000,000.00 9,993,775.68 09/30/2025 4.25010/07/2022 9,992,000.00 AA+3133ENP95 333

4.300FEDERAL FARM CREDIT BANK11384 10,000,000.00 9,995,676.70 09/30/2025 4.25010/07/2022 9,992,000.00 AA+3133ENP95 333

4.125FEDERAL FARM CREDIT BANK11385 10,000,000.00 9,967,097.95 09/29/2027 4.00010/07/2022 9,952,600.00 AA+3133ENQ29 1,062

4.300FEDERAL FARM CREDIT BANK11386 10,000,000.00 9,995,676.70 09/30/2025 4.25010/07/2022 9,992,000.00 AA+3133ENP95 333

0.871FEDERAL HOME LOAN BANK11363 2,500,000.00 2,500,114.15 11/26/2025 0.87506/14/2021 2,414,675.00 AA+3130AMKK7 390

0.800FEDERAL HOME LOAN BANK11364 1,000,000.00 1,000,000.00 09/29/2025 0.80006/29/2021 968,470.00 AA+3130AMSY9 332

0.800FEDERAL HOME LOAN BANK11365 1,000,000.00 1,000,000.00 09/29/2025 0.80006/29/2021 968,470.00 AA+3130AMSY9 332

0.800FEDERAL HOME LOAN BANK11366 1,000,000.00 1,000,000.00 09/29/2025 0.80006/29/2021 968,470.00 AA+3130AMSY9 332

1.575FEDERAL HOME LOAN BANK11372 5,000,000.00 5,000,000.00 10/28/2025 2.12501/28/2022 4,920,950.00 AA+3130AQMQ3 361

1.633FEDERAL HOME LOAN BANK11375 3,000,000.00 2,999,664.89 11/18/2025 1.62502/18/2022 2,916,240.00 AA+3130AQPP2 382

1.477FEDERAL HOME LOAN BANK11377 1,000,000.00 999,956.42 08/01/2025 2.12502/22/2022 984,150.00 AA+3130AQSG9 273

4.214FEDERAL HOME LOAN BANK11380 7,000,000.00 7,004,278.71 09/11/2026 4.25010/07/2022 7,003,010.00 AA+3130ATHV2 679

6.052FEDERAL HOME LOAN BANK11413 3,000,000.00
3,000,000.00 02/24/20286.25002/28/2023 2,996,220.00 AA+3130AUWT7 1,210

4.816FEDERAL HOME LOAN BANK11414 2,000,000.00 1,994,948.01 06/30/20274.70003/30/2023 1,997,740.00 AA+3130ASH44 971

4.748FEDERAL HOME LOAN BANK11467 5,000,000.00 4,985,004.56 06/11/20274.62505/24/2024 5,060,100.00 AA+3130B1EF0 952

5.050FEDERAL HOME LOAN MORTGAGE CO11409 3,000,000.00 3,000,000.00 02/10/20255.05002/10/2023 3,000,510.00 AA+3134GYGK2 101

5.005FEDERAL HOME LOAN MORTGAGE CO11411 3,000,000.00 3,000,000.00 11/22/20245.00002/22/2023 3,000,420.00 AA+3134GYGJ5 21 90,186,337.3889,849,695.0090,500,000.00101,239,659.75Subtotal and Average 3.911 605 Treasury Securities - Coupon

0.677U.S.TREASURY NOTE11361 2,500,000.00 2,489,535.99 10/31/2025 0.25005/28/2021 2,401,350.00 N/A91282CAT8 364

1.428U.S.TREASURY NOTE11370 1,000,000.00 988,991.05 11/30/2025 0.37501/25/2022 958,630.00 N/A91282CAZ4 394

1.223U.S.TREASURY NOTE11371 2,000,000.00 1,999,645.73 11/15/2024 0.75001/25/2022 1,997,000.00 N/A91282CDH1 14

1.330U.S.TREASURY NOTE11373 3,000,000.00 2,999,346.65 11/15/2024 0.75002/02/2022 2,995,500.00 N/A91282CDH1 14

3.909U.S.TREASURY NOTE11388 5,000,000.00 4,912,982.77 02/28/2026 2.50012/16/2022 4,889,050.00 N/A9128286F2 484

4.221U.S.TREASURY NOTE11390 5,000,000.00 4,996,410.39 11/15/2024 2.25012/22/2022 4,995,250.00 N/A912828G38 14

3.900U.S.TREASURY NOTE11391 5,000,000.00 4,822,081.91 11/15/2026 2.00012/22/2022 4,792,600.00 N/A912828U24 744

4.245U.S.TREASURY NOTE11392 5,000,000.00 4,993,635.45 11/15/2024 0.75012/22/2022 4,992,500.00 N/A91282CDH1 14 Portfolio CITY
APData Updated: : 11/12/2024 14:10
Run Date: 11/12/2024 - 14:10 PM (PRF_PM2) 7.3.11
Report Ver. 7.3.11
11/19
11 YTM

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4.399BANK OF NEW YORK11445 3,000,000.00 2,948,667.79 04/28/2028 3.85005/18/2023 2,936,250.00 A06406RAH0 1,274

4.601Cargill Inc11471 8,000,000.00 8,551,076.16 06/18/2027 7.41010/29/2024 8,517,840.00 N/A141784AM0 959

4.965Citigroup/Smith Barney11461 5,709,000.00 5,873,548.16 09/29/2028 5.80301/09/2024 5,929,196.13 A+17325FBB3 1,428

4.791Citigroup/Smith Barney11463 2,000,000.00 2,070,104.38 09/29/2028 5.80302/12/2024 2,077,140.00 A+17325FBB3 1,428

5.540JPMORGAN11460 3,600,000.00 3,474,487.81 06/15/2026 3.20010/10/2023 3,527,064.00 A146625HRS1 591

4.737Mercy Heathcare11464 3,390,000.00 3,341,652.89 07/01/2028 4.30202/12/2024 3,349,387.80 A+58942HAC5 1,338

5.130META Platforms11459 3,000,000.00 2,950,302.45 05/15/2028 4.60010/10/2023 3,020,100.00 A130303M8L9 1,291

4.770Mutual of Omaha11468 10,000,000.00 9,991,015.11 10/15/2029 4.75010/28/2024 9,878,400.00 A+62829D2E9 1,809

4.911Pacific Life Global11462 4,200,000.00 4,198,283.05 01/11/2029 4.90002/08/2024 4,211,046.00 AA-6944PL2Z1 1,532

4.970Pacific Life Global11465 1,900,000.00 1,933,155.01 07/18/2028 5.50003/28/2024 1,943,016.00 AA-6944PL2U2 1,355

4.471Pacific Life Global11469 10,000,000.00 10,012,278.79 08/28/2029 4.50010/28/2024 9,914,000.00 AA-6944PL3C1 1,761

4.889Prime Alliance Bank11466 5,000,000.00 5,104,263.96 12/08/2028 5.46703/28/2024 5,119,050.00 AA-74368CBV5 1,498

4.550Prime Alliance Bank11470 5,000,000.00 5,136,703.09 06/12/2029 5.21510/28/2024 5,096,350.00 AA-74368CBY9 1,684

5.051US Bank11439 5,000,000.00
4,968,396.69 01/21/20252.05005/16/2023 4,968,150.00 A+90331HPL1 81 70,553,935.3470,486,989.9369,799,000.0041,508,397.03Subtotal and Average 4.786 1,348 CAMP

5.030CAMP10002 78,374,474.23 78,374,474.23 5.03007/11/2023 78,374,474.23SYS10002 1 78,374,474.2378,374,474.2378,374,474.2378,052,559.54Subtotal and Average 5.030 1 Municipal Bonds

4.554Napa Valley USD11423 105,000.00 96,657.67 08/01/2027 1.34204/21/2023 96,711.30 N/A630362ES6 1,003

4.387Ponoma USD11424 270,000.00 250,752.66 08/01/2027 1.51604/21/2023 250,884.00 N/A732098PH5 1,003 347,410.33347,595.30375,000.00347,019.28Subtotal and Average 4.434 1,003 Negotiable CD

1.952Third Federal Savings and Loan11355 245,000.00 245,000.00 11/25/2024 1.95011/25/2019 244,510.00 FDIC88413QCK2 24

5.003Alliant Credit Union11396 245,000.00 245,000.00 12/30/2027 5.00012/30/2022 252,712.60 FDIC01882MAC6 1,154

4.973B1BANK BATON11447 245,000.00 245,000.00 11/19/2024 4.95005/19/2023 245,019.60 FDIC098079AR7 18

4.404BANK FIVE NINE11434 245,000.00 245,000.00 05/12/2027 4.40005/12/2023 247,619.05 FDIC062119BU5 922

5.023Bank Hapoalim BM NY11446 243,000.00 243,000.00 11/19/2024 5.00005/19/2023 242,917.38 FDIC06251A5M8 18

4.799BMO HARRIS C11426 243,000.00 243,000.00 05/09/2025 4.80005/09/2023 243,381.51 FDIC05600XQA1 189

0.546BMW Bank of No America #3514111362 200,000.00 199,919.79 09/25/2025 0.50006/24/2021 193,442.00 FDIC05580AXF6 328

5.073Bank of Baroda #3368111436 243,000.00 243,000.00 11/15/2024 5.05005/15/2023 242,910.09 FDIC06063HQL0 14

4.856California Credit Union11394 245,000.00 245,000.00 12/27/2024 4.85012/27/2022 245,009.80 FDIC130162AQ3 56

4.504Capital One#429711440 243,000.00 243,000.00 05/17/2027 4.50005/17/2023 246,078.81 FDIC14042RVT5 927 Portfolio CITY
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1.449CBC Fed Credit Union11374 245,000.00 245,000.00 08/18/2025 1.45002/18/2022 239,526.70 FDIC12481GAW7 290

1.852CELTIC BANK11351 245,000.00 245,000.00 11/27/2024 1.85011/27/2019 244,497.75 FDIC15118RTC1 26

4.807CIBC BK USA11438 243,000.00 243,000.00 05/16/2025 4.80005/16/2023 243,408.24 FDIC12547CBG2 196

4.704CIT Bank11401 245,000.00 245,000.00 01/06/2026 4.70001/06/2023 246,501.85 FDIC20416TAX0 431

4.404Comenity Capital Bank11431 245,000.00 245,000.00 05/10/2027 4.40005/10/2023 247,611.70 FDIC597338AJ1 920

4.680COMMUNITY BK11441 245,000.00 245,000.00 11/18/2024 4.90005/17/2023 245,044.10 FDIC20349RBZ0 17

4.605COMMUNITY FI11448 245,000.00 245,000.00 05/19/2026 4.60005/19/2023 246,918.35 FDIC20368TDL1 564

4.857CROSS RIVER11449 243,000.00 243,000.00 05/19/2025 4.85005/19/2023 243,483.57 FDIC227563CJ0 199

4.555Discover Bank #564911430 243,000.00 243,000.00 05/11/2026 4.55005/10/2023 244,598.94 FDIC2546734T0 556

4.555GULF CAP BK11442 243,000.00 243,000.00 05/17/2026 4.55005/17/2023 244,632.96 FDIC40219MAG9 562

4.800Medallion Bank Salt Lake City11452 245,000.00 245,000.00 05/22/2025 4.80005/22/2023 245,543.90 FDIC58404DSD4 202

4.604Morgan Stanley Bank11432 243,000.00 243,000.00 05/10/2027 4.60005/10/2023 246,632.85 FDIC61690U5T3 920

1.852Raymond James BK11352 245,000.00 245,000.00 11/26/2024 1.85011/26/2019 244,478.15 FDIC75472RAN1 25

5.074CHARLES SCHWAB11433 243,000.00
243,000.00 11/05/20245.05005/11/2023 243,014.58 FDIC15987UBR8 4

4.505SOUTHERN STS11427 245,000.00 245,000.00 05/11/20264.50005/09/2023 246,511.65 FDIC843879EC7 556

4.505SOUTHERN STS11443 245,000.00 245,000.00 05/15/20264.50005/17/2023 246,531.25 FDIC843383CR9 560

4.655SOUTHERN FIR11453 245,000.00 245,000.00 05/26/20264.65005/26/2023 247,146.20 FDIC84287PHR6 571

5.022SYNOVUS BK C11450 243,000.00 243,000.00 12/19/20245.00005/19/2023 243,133.65 FDIC87164DWC0 48

4.973TRANSPORTATI11451 245,000.00 245,000.00 11/19/20244.95005/19/2023 245,019.60 FDIC89388CGQ5 18

4.454UNIVEST NATL BK11435 245,000.00 245,000.00 05/12/20274.45005/12/2023 247,913.05 FDIC91527PBX4 922

4.395BANK UTAH OGDEN11429 245,000.00 245,000.00 05/11/20264.50005/10/2023 246,511.65 FDIC065427AE6 556

4.803Valley Strong11393 245,000.00 245,000.00 06/23/20254.80012/23/2022 245,686.00 FDIC920133AK1 234

5.023WASHINGTON TRUST11444 243,000.00 243,000.00 11/18/20245.00005/17/2023 243,051.03 FDIC940637QZ7 17

5.022Wells Fargo Bank11428 245,000.00 245,000.00 11/12/20245.00005/09/2023 245,036.75 FDIC949764CD4 11 8,260,919.798,286,035.318,261,000.008,488,238.71Subtotal and Average 4.292 355 Non-US Corporate Bond

4.905Australia National Bank11457 5,000,000.00 4,999,003.57 06/13/2028 4.90007/19/2023 5,050,250.00 AA-63253QAE4 1,320 4,999,003.575,050,250.005,000,000.004,998,992.83Subtotal and Average 4.905 1,320 304,608,604.89 303,419,836.67 4.421 551303,027,282.21 303,535,073.02Total and Average Portfolio CITY
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Par Value Book Value
Stated
RateMarket Value
October 31, 2024
Portfolio Details - Cash
Average
BalanceIssuer
Portfolio Management
Deputy Treasurer Monthly Reports
Days to
MaturityS&PCUSIP Investment #
Purchase
Date

0.00 304,608,604.89 303,419,836.67 4.421 551
0 468,385.28
468,385.28
468,385.28
468,385.28
Subtotal
Accrued Interest at PurchaseAverage Balance
303,495,667.49 304,003,458.30Total Cash and Investments Portfolio CITY
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14 Notes to Investment Report

1. REPORTING ENTITY
City of Torrance was established May 31, 1921 and adopted a city charter form of government on January 7, 1947.

Under City Charter section 630 CITY TREASURER. It shall be the duty of the City Treasurer to receive and safely keep all moneys which shall come into his/her hands as City Treasurer. He/S he shall comply with
all provisions of law governing the deposit and securing of public funds. He/She shall also comply with all the provisions of the general laws of the State governing the handling of such trust funds as may come into his/her possession. He/She shall pay out moneys only on warrants s igned by persons designated by law, or ordinance, as the proper persons to sign warrants and as to trust funds which may come into his/her possession or control by virtue of some law, ordinance or resolution, by warrant or other order, in accordance with the provisions of such law, ordina nce or resolution. He/She shall at regular intervals, at least once each month, submit to the Director of Finance a written report and accounting of all receipts, disbursements and fund balances, a copy of which report he/she shall file with the City Council.

The City Treasurer may appoint a deputy, or depu
ties, from an eligible list to be prepared in accordance with the proceedings prescribed in the civil service system of the City, such deputy or deputies to receive such compensation as may be provided by the City Council. (Ratified Gen. Mun. Elec. 4/10/56, Amend. No. 8; Approved by State Le gislature Concurrent Res. No. 3 on 1/9/57).

2. BASIS FOR REPORTING
This Investment Report has been prepared in accordance with the State of California Government Code §53600 and City of Torrance Investment Policy as noted in the City Charter. The City of Torrance Investment Policy is approved and adopted annually by City Council. The Investment Policy is annually submitted by the City Trea surer to the Investment Advisory Committee for review before being forwarded to the City Council. The investment Advisory Committee is made up of City Treasurer, City Manager, City Attorney, Finance Director, and Deputy City Treasurer.

3. ASSUMPTIONS
The Investment Report represents a specific snapshot in time and is compared to other market performers during that same period which includes but is not limited to: Constant Maturing Treasury 2‐ year term rates, Local Agency Investment Fund (State of California), and prior year performance. All investment activity calculations are results from Sy mPro portfolio management software v7.3.6.

Adjusted by Premiums/Discounts represent the premium/discount cost involved to secure higher or lower yield securities. The cost of the premium or discount is amortized down or up to par over the life of the bond until reaching maturity. By amortizing, the amount of taxable interest is reduced for each year the ci
ty owns the bond. This is because the amortized premium or discount offsets the ordinary income of the coupon payment.

There is no capital loss or gain to report if bonds are kept to maturity.

11/19
15 Notes to Investment Report

4. COMPLIANCE
The Investment Report is required to be submitted to City Council on a monthly basis. State of California statutes requires quarterly reporting. GASB 31 section requires market changes be booked annually but reported monthly as part of this report.SB 564 requires quarterly reporting to the legislative body.

5. LAIF RISK

LAIF statute §16429.3 Deposits; prohibited transfers and loans; impoundment or seizure:

Moneys placed with the Treasurer for deposit in the Local Agency Investment Fund by cities, counties, special districts, nonprofit corporations, or qualified quasi‐governmental agencies shall not be subject to either of the following:
a. Transfer or loan pursuant to Section 163 10, 16312, or16313. b. Impoundment or seizure by any state official or state agency

LAIF statute §16429.4 Right of withdrawal:

The right of a city, county, city and county, special district, nonprofit corporation, or qualified quasi‐ governmental agency to withdraw its deposited moneys from the Local Agency Investment Fund, up on demand, may not be altered, impaired, or denied, in any way, by any state official or state agency based upon the state’s failure to adopt a State Budget by July 1 of each new fiscal year.

Additional information about LAIF may be found on the California State Treasurer Website:
http://www.treasurer.ca.gov/pmia‐laif/answer/laifstatutes.asp

11/19
16 Glossary

ACCRUED INTEREST. Interest that has accumulated between the most recent payment and the sale of a bond or other fixed‐income security. At the time of sale, the buyer pays the seller the bond's price plus "accrued interest," calculated by multiplying the coupon rate by the fraction of the coupon period tha t has elapsed since the last payment. (If a bondholder receives $40 in coupon payments per bond semiannually and sells the bond one‐quarter of the way into the coupon period, the buyer pays the seller $10 as the latter's proportion of interest earned.) AGENCIES. Also referred to as Federal Agencies or Fe d Agencies and include such organizations or enterprises as the:

Federal Home Loan Bank (FHLB), Federal Home Loan Mortgage Corporation (FHLMC), Federal Farm Credit Banks (FFCB), and Government National Mortgage Association (GNMA). See FEDERAL AGENCIES or the specific organization/enterprise in this glossary for additional information.

AMORTIZATION. The spreading out of capital e xpenses for intangible assets over a specific period of time (usually over the asset's useful life) for accounting and tax purposes. Amortization is similar to depreciation, which is used for tangible assets, and to depletion, which is used with natural resources.

ASKED. The price at which securities are offered.

BANKER'S ACCEPTANCE ("BA"
). A draft, bill, or exchange accepted by a bank or a trust company. Both the issuer and the accepting institution guarantee payment of the bill.

BASIS POINT. Common unit of measure used for expressing changes in interest rates; one basis point equates to 1/100th of 1%. (i.e. 0.1% equals 10 basis points.)
BID. The price offered by a buyer of securities (when one sells securities, one asks for a bid). See "Offer".

BOND. Bonds are commonly referred to as fixed‐income securities and are one of the three main generic asset classes, along with stocks (e quities) and cash equivalents. Many corporate and government bonds are publicly traded on exchanges, while others are traded only over‐the‐counter (OTC).

BROKER. A broker is an individual or firm that charges a fee or commission for executing buy and sell orders submitted by an investor. It is also the role of a firm when it acts as an agent for a customer and charges the customer a commission for its services.

BULLET BOND. Bullet Bonds are non‐callable bonds, which cannot be redeemed early by the issuer.

CALLABLE BOND. A bond that can be redeemed by the issuer earlier than the bond’s maturity date. Callable bonds with specific details as to when the bond may be called back are noted. Embedded options attached to callable bonds detail how the issuer may “call” back the security. Th
ree forms of embedded options for callable bonds are:
 American Option: Bond may be called back by the issuer at any time after the lockout period expires. (continuously callable)
 Bermudian Option: The issuer has the right to call the bond on the p redetermined interest payment dates only.
 European Option: Allows the holder to exercise the option (i.e. to buy) only on the option expiration date.
 1X: One time callable only
 6M: Callable only after predetermined 6 month lockout period.

CERTIFICATE OF DEP OSIT ("CD"). A time deposit with a specific maturity, as evidenced by a certificate. Large‐ 11/19
17 Glossary

denomination CDs are typically negotiable. A certificate of deposit (CD) is a savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate and can be issued in any denomination. CDs are generally issued by commercial banks and are insured by the FDIC. The ter m of a CD generally ranges from one month to five years.

COLLATERAL. Securities, evidence of deposit, or other property which a borrower pledges to secure repayment of a loan.

Also refers to securities pledged by a bank to secure deposits of public monies.

COMPREHENSIVE ANNUAL FINANCIAL REPORT ("CAFR"). The official annual rep ort for the City of Torrance. It includes combined statements for each individual fund and account group, which are prepared in conformity with GAAP. It also includes supporting schedules that are necessary to demonstrate compliance with finance‐related legal and contractual provisions, extensive introductory material, and a detailed statistical section.

CORPORATE BOND/NOTES. A deb
t security issued by a corporation and sold to investors. The backing for the bond is usually the payment ability of the company, which is typically money to be earned from future operations.

COUPON. The annual rate of interest that a bond's issuer promises to pay the b ondholder on the bond's face value. It can also be a certificate attached to a bond, which evidences interest due on a payment date. The annual interest rate paid on a bond, expressed as a percentage of the face value.

DEALER. A dealer, as opposed to a broker, acts as a principal in all transactions, buying and selling for his own accou nt.

DEBENTURE. A bond secured only by the general credit of the issuer.

DELIVERY VERSUS PAYMENT. There are two methods of delivery of securities: (1) delivery versus payment (DVP); and (2) delivery versus receipt (DVR). DVP is delivery of securities with an exchange of money for the securities. DVR is deliver y of securities with an exchanged of a signed receipt for the securities.

DERIVATIVES. (1) Financial instruments that are linked to, or derived from, the movement of one or more underlying indexes or securities, and may include a leveraging fac tor; or (2) financial contracts based upon a notional amount whose value is derived from an underlying index or security (e.g., interest rates, foreign exchange rates, equities, or commodities).

DISCOUNT. The difference between the acquisition cost of a security and its value at maturity, when quoted at lower than face value. A security that sells below original offering price shortly after sale is also co nsidered to be at a discount. In finance, discount refers to the condition of the price of a bond that is lower than par, or face value. The discount equals the difference between the price paid for a security and th e security's par value.

DISCOUNT SECURITIES. Non‐interest bearing money market instruments that are issued a discount and that are redeemed at maturity for full face value (e.g., U.S. Treasury Bills).

DIVERSIFICATION. Dividing investment funds among a variety of securities that offer independent returns.

FEDERAL AGENCIES. Special government organiza tions set up for a specific purpose such as the management of resources, financial oversight of industries or national security issues. These organizations are typically created by legislative action, but may initially be set up by a Presidential Order as well. The directors of these agencies are typically selected by Presidential appoi ntment. A number of these organizations issue securities such as stocks and bonds that have been historically popular with investors. Agencies of the Federal Government that were established to supply credit to various classes of institutions and individuals (e.g., S&Ls, small business firms, 11/19
18 Glossary

students, farmers, farm cooperative, and exporters).

FEDERAL DEPOSIT INSURANCE CORPORATION ("FDIC"). A federal agency that insures bank deposits, currently up to $ 250,000.00 per deposit.

FEDERAL FARM CREDIT BANK (“FFCB”). In the United States, a network of federally‐chartered financial institutions designed to provide credit‐related services to the agricultural and f arming sectors of the economy. In total, this government‐sponsored enterprise comprises approximately 100 financial institutions that serve all 50 states and Puerto Rico
FEDERAL FUNDS RATE. The rate of interest at which Fed funds are traded. This rate is currently pegged by the Federal Reserve through open‐market operations.

FEDERAL HO ME LOAN BANKS ("FHLB"). Government‐sponsored wholesale banks (currently 12 regional banks) which lend funds and provide correspondent banking services to member commercial banks, thrift institutions, credit unions, and insurance companies. The mission of the FHLBs is to liquefy the housing‐related assets of its member, who must purchase stock in their District Bank. FH LB ‐ An organization created by the Federal Home Loan Bank Act of 1932 to increase the amount of funds available for lending institutions who provide mortgages and similar loan agreements to individuals. This system was created in response to the depressive economic conditions of the era, which had im paired the U.S. banking system.

FEDERAL HOME LOAN MORTGAGE CORP (“Freddie Mac or FHLMC”). FHLMC is a stockholder‐owned, government‐ sponsored enterprise (GSE) chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing for middle income Americans. The FHLMC purchases, gua rantees and securitizes mortgages to form mortgage‐backed securities. The mortgage‐backed securities that it issues tend to be very liquid and carry a credit rating close to that of U.S. Treasuries.

FEDERAL NATIONAL MORTGAGE ASSOCIATION (`FNMA"). FNMA, like GNMA, was charted under the Federal National Mortgage Association Act of 1938. FN MA is a federal corporation working under the auspices of the Department of Housing and Urban Development (HUD). It is the largest single provider of residential mortgage funds in the United States. Fannie Mae, as the corporation is called, is a private stockholder‐owned corporation. The corporation's purchases include a variety of adjustable mortgag es and second loans, in addition to fixed‐rate mortgages. FNMA's securities are also highly liquid and are widely accepted. FNMA assures and guarantees that all security holders will receive timely payment of principal and interest. Fannie Mae is a publicly‐traded company which operates under a congressional chart er that directs Fannie Mae to channel its efforts into increasing the availability and affordability of homeownership for low‐, moderate‐ and middle‐income Americans.

FEDERAL OPEN MARKET COMMITTEE ("FOMC"). The FOMC consist of seven members of the Federal Reserve Board and five of the 12 Federal Reserve Bank Presidents. Th e President of the New York Federal Reserve Bank is a permanent member while the other Presidents serve on a rotating basis. The Committee periodically meets to set Federal Reserve guidelines regarding purchases and sales of government securities in the open market as a means of influencing the volume of bank cr edit and money.

FEDERAL RESERVE SYSTEM. Also known as “The Fed.” The central bank of the United States created by Congress and consisting of a seven‐member Board of Governors in Washington, D.C., 12 regional banks, and about 5,700 commercial banks that are members of the system.

GOVERNMENT NATIONAL MORTGAGE ASSOCIATI ONS ("GNMA" or "Ginnie Mae"). Securities that influence the volume of bank credit that is guaranteed by GNMA and issued by mortgage bankers, commercial banks, savings and loan 11/19
19 Glossary

associations, and other institutions. The full faith and credit of the U.S. Government protect a security holder. Ginnie Mae securities are backed by the FHA, VA, or FMHM mortgages. The term "pass‐through" is often used to describe Ginnie Maes.

GOVERNMENTAL ACCOUNTING STANDARDS BOARD (“GASB”). An organization whose main purpose is to improve an d create accounting reporting standards or generally accepted accounting principles (GAAP). These standards make it easier for users to understand and use the financial records of both state and local governments. The Government Accounting Standards Board (GASB) is funded and monitored by the Financial Accounting Foundation (FAF).

IMPLIED RATING (“IMP”). Government Sponsored Enterprises ex: Federal Home Loan Bank, Federal Home Loan Mortgage Corp, Federal National Mortgage Association each carrier the rate of the US Treasury. There are GSE that are not officially rated by a credit rating agency but carry an implied rating because they are GSE. An example of this is Farmer Mac.

LIQUIDITY. A Liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value. In the money market, a security is said to be liquid if the spread between bid and asked prices is narrow, and reasonable size can be done at those quotes.

LOCAL AGENCY INVESTMENT FUND ("LAIF"). Monies from local governmental units may be remitted to the California State Treasurer for deposit in this special fund for the purpose of investment.

LOCKOUT (BOND FEATURE). The period of time when a security may not be redeemed by the issuer.

MARKET VALUE. The price at which a security is tradi ng and could presumably be purchased or sold.

MASTER REPURCHASE AGREEMENT. A written contract covering all future transactions between the parties to repurchase‐reverse repurchase agreements that establishes each party's rights in the transactions. A master agreement will often specify, among other things, the right of the buyer (lender) to liquidate the underlying securities in the event of default by the seller (bo rrower).

MATURITY. The date upon which the principal or stated value of an investment becomes due and payable.

Medium Term Notes ‐ A corporate note continuously offered by a company to investors through a dealer. Investors can choose from differing maturities, ranging from nine months to 30 years.

MONEY MARKET. The market in w hich short‐term debt instruments (e.g., bills, commercial paper, and banker's acceptances) are issued and traded.

NOT RATED (“NR”). GSE (government sponsored enterprises) or any security that are not officially rated by a credit rating agency.

OFFER. The price asked by a seller of securities (when one buys securities, one asks for an offer). See '`Ask ed" and "Bid." OPEN MARKET OPERATIONS. Purchases and sales of government and certain other securities in the open market by the New York Federal Reserve Bank, as directed by the FOMC in order to influence the volume of money and credit in the economy.

Purchases inject re serves into the bank system and stimulate growth of money and credit; sales have the opposite effect.

Open market operations are the Federal Reserve's most important and most flexible monetary policy tool. 11/19
20 Glossary

PORTFOLIO. A collection of securities that an investor holds.

PREMIUM ‐ A premium is the total cost of an option. The difference between the higher price paid for a fixed‐income security and the security's face amount at issue.

PRIMARY DEALER. A group of government securities dealers that submit daily reports of mark et activity and positions, and monthly financial statements to the Federal Reserve Bank of New York, and are subject to its informal oversight.

Primary dealers include Securities and Exchange Commission (SEC) — registered securities broker‐dealers, banks, and a few unregulated firms.

PRUDENT INVESTOR RULE. An investment standard. A fiduciary, such as a trus tee, may invest in a security if it is one that would be bought by a prudent investor acting in like capacity, who is seeking reasonable income and preservation of capital.

QUALIFIED PUBLIC DEPOSITORIES. A financial institution that: (1) does not claim exemption from the payment of any sales, compe
nsating use, or ad valorem taxes under the laws of this State; (2) has segregated for the benefit of the commission eligible collateral having a value of not less than its maximum liability; and (3) has been approved by the Public Deposit Protections Commission to hold public deposits.

RATE OF RET URN. The yield obtainable on a security based on its purchase price or it current market price.

REPURCHASE AGREEMENT ("RP" OR "REPO"). A holder of securities sells them to an investor with an agreement to repurchase the securities at a fixed price on a fixed date. The security "buyer” in effect, lends the "seller " money for the period of the agreement, and the terms of the agreement are structured to compensate him for this. Dealers use RP extensively to finance their positions. Exception: when the Fed is said to be doing RP, it is lending money (increasing bank reserves).

SAFEKEEPING. A service to customers r endered by banks for a fee whereby securities and valuables of all types and descriptions are held in the bank's vaults for protection.

SECONDARY MARKET. A market made for the purchase and sale of outstanding issues following the initial distribution.

SECURITIES AND EXCHANGE COMMISSION. An agency created by Congress to administer securities le gislation for the purpose of protecting investors in securities transactions.

SEC RULE 15c3‐1. See "Uniform Net Capital Rule." SEC Rule 15c3‐1 requires broker‐dealers to maintain the following minimum net capital requirements in order to offer sufficient protection for the firm's customers:
 $250,000 for broker‐dealers who conduct general securities business and carry customer funds and securities  $50,000 for broker‐dealers who introduce accounts to another broker‐dealer on a fully disclosed basis, receive but do not hold customer securities for delivery to the clearing broker‐dealer and do not carry customer accounts
 $25,000 for broker‐dealers that only handle mutual fund transactions and do not hold customer funds or securities
 $5,000 for broker‐dealers who do not directly or indirectly receive securities from customers (known as introducing brokers)
11/19
21 Glossary

STEP‐UP BOND. A bond that pays an initial coupon rate for the first period, and then a higher coupon rate for the following periods. A step‐up bond is one in which subsequent future coupon payments are received at a higher, predetermined amount than previous or current periods. These bonds usually have a callabl e component.

STRUCTURED NOTES. Notes issued by instrumentalities (e.g., FHLB, FNMA, SLMA) and by corporations, that have imbedded options (e.g., call features, step‐up coupons, floating rate coupons, derivative‐based returns) in their debt structure, The market performance of structured notes is affected by fluctuating interest rates; the volatil ity of imbedded options; and shifts in the yield curve.

TAX AND REVENUE ANTICIPATION NOTES (TRANs). Notes issued in anticipation of receiving future tax receipts and revenues at a future date.

TREASURY BILLS. A non‐interest‐bearing discount security that is issued by the U.S. Treasury to finance the national debt. Mo
st T‐bills are issued to mature in three months, six months, or one year.

TREASURY BONDS. Long‐term, coupon‐bearing U.S. Treasury securities that are issued as direct obligations of the U.S.

Government, and having initial maturities of more than 10 years.

TREASURY NOTES. Medium‐term, coupon‐bearing U. S. Treasury securities that are issued as direct obligations of the U.S.

Government, and having initial maturities of two to 10 years. U S Notes ‐ A treasury note is a marketable U.S. government debt security with a fixed interest rate and a maturity between one and 10 years. Treasury notes can be bought eithe r directly from the U.S. government or through a bank.

UNIFORM NET CAPITAL RULE. SEC requirement that member firms, as well as non‐member broker‐dealers in securities, maintain a maximum ratio of indebtedness to liquid capital of 15 to one. Also called net capital rule and net capital ratio.

Indeb
tedness covers all money that is owed to a firm, including margin loans and commitments to purchase securities (one reason that new public issues are spread among members of underwriting syndicates). Liquid capital includes cash and assets easily converted to cash.

YIELD. The rate of annual income return on an inves tment, expressed as a percentage. (a) INCOME YIELD is obtained by dividing the current dollar income by the current market price for the security. (b) NET YIELD OR YIELD TO MATURITY is the current income yield minus any premium above par or plus any discount from par in pur chase price, with the adjustment spread over the period from the date of purchase to the date of maturity of the bond.

YIELD TO MATURITY (YTM). The percentage rate of return paid on a bond or note if the investor buys and holds it to its maturity date. The calculation for YT M is based on the coupon rate, length of time to maturity, and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.

Sources:
 www.investopedia.com
 www.thefreedictionary.com
 www.msrb.org/glossary/definition/note.aspx
 CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION (CDIAC) California Public Fund Investment Primer, December 2009
11/19
22

Torrance City CouncilDecember 17, 2024

Torrance City Council
December 17, 2024