The Board of Directors (the "Board") of the New Hampshire Municipal Bond Bank (the "Bank") has adopted these investment policies for the accomplishment of the investment objectives set forth below, while ensuring compliance with all applicable state and federal laws. This policy addresses the Unrestricted Operating Funds (the “Funds”) and funds held in accordance with the General Bond Resolutions.
Identification of Duties and Investment Responsibilities for Unrestricted Operating Funds
- Board. The Board is responsible for establishing the Investment Policy Statement. The Board, with the assistance of staff, monitors the performance of investments; ensures funds are invested in accordance with NHMBB policies; studies, recommends, and implements policy and operational procedures that will enhance the investment of the assets; and ensures that proper internal controls are developed to safeguard the assets.
Bank custodian. The bank trustee/custodian(s) will hold all cash, securities and commingled or mutual funds. (The bank trustee/custodian(s) will deliver monthly asset and transaction statements as directed by Executive Director or Assistant Executive Director.
Investment Goals and Objectives. The investment of the unrestricted operating funds is to provide income to supplement administration of current programs, provide a source of capitalization for new programs, to reduce susceptibility to unanticipated expenditures or revenue shortfalls, and to help maintain strong credit ratings.
Return and Risk Objectives. The overall return objective of the Funds is to maintain purchasing power. Recognizing that the assets of the portfolio shall be invested to limit the risk of capital losses, the assets shall be invested with the goal that the total return on the portfolio not be less than 0 % in the future three year period.
- The portfolio performance should be measured primarily versus inflation as defined by CPI-U and secondarily versus the Barclays Short Term Bond Index.
Allowable Investments. The Bank may purchase any assets that are designated in RSA 35A:6 and RSA 35A:11.
Liquidity Constraint. The portfolio shall maintain liquidity to meet the required operating needs of the Bank and potential shortfalls in receipts from the Governmental Units. All assets in portfolio will be able to be liquidated in a period of 5 business days.
Tax Concerns. NHMBB is a tax exempt entity and returns on its investments are not taxed in most circumstances.
The Board will review investment performance on a semiannual basis or more frequently as market conditions dictate. The investment policy statement will be reviewed annually or more frequently as required by changes in laws, regulations or capital market conditions.
The Board will determine the asset allocation based on the investment objectives, risks and liquidity that are outlined above. The asset allocation will be reviewed on a semi-annual basis at a minimum.
For Funds Held in Accordance with General Bond Resolutions
Funds of the Bank held in accordance with the terms of its General Bond Resolution adopted December 1, 1978, as amended, its General Bond Resolution adopted July 19, 1979, as amended, and its General Bond Resolution adopted July 14, 2005, as amended, shall be invested by the trustee in accordance with the provisions of each respective General Bond Resolution, see Appendix A, as instructed by the Executive Director or Assistant Director.
Approved: August 5, 2014