HomeMy WebLinkAboutBack-Up DocumentCITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
TO: Arthur Noriega
City Manager
FROM: Erica T. Paschal Darling, CPA
Director
Finance Department
Paschal, Erica Dlgl"y PcEr
Date: tal 2023.10.24 s'9"edb10:12:59ashal, -04'00ica'
DATE: October 24, 2023
SUBJECT: Purchase of Public Bonds from
State of Israel
REFERENCES:
ENCLOSURES:
Per the directive passed during the October 12th City Commission meeting, the City has conducted a review to
determine the feasibility of purchasing the maximum amount of public bonds from the State of Israel within the
City of Miami's Investment principles. As part of this review, the City worked with its Investment Advisors, PFM
Asset Management.
The City's Investment Policy, as adopted by the City Commission, has the following criteria for this type of
investment:
• Allows for investments in Foreign Sovereign Governments that belong to the Organization for Economic
Cooperation and Development (OECD) at the time of purchase.
o Israel is currently a member country.
• The investment must have the highest short-term or two highest long-term rating categories at the time of
purchase.
o Israel's current ratings meet this requirement.
• The maximum amount of the investment per issuer, is 2% of the size of the investment portfolio at the time
of purchase.
o Currently, the investment portfolio is approximately $650 million, allowing for a maximum
investment of $13 million. As of the date of this memo, the City has enough liquid funds to invest at
this capacity without having to liquidate any of the investments in the portfolio.
The City primarily invests in United States Treasuries, Agencies, and Commercial Paper. The yields of the United
States Treasuries and State of Israel Bonds are comparable. However, the United States Treasuries have a lower risk
profile.
In summary, the City Commission can direct the City Administration to purchase up to 2% of the Investment
Portfolio if at the time of purchase, the ratings do not change. This would maintain compliance with the City's
Investment Policy.