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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2018 <br /> <br /> <br /> <br />(51) <br /> <br />NOTE 2 DEPOSITS AND INVESTMENTS (CONTINUED) <br />C. Investments (Continued) <br />Credit Risk – This is the risk that an issuer or other counterparty to an investment will <br />not fulfill its obligations. Minnesota Statutes limit the City’s investments to direct <br />obligations or obligations guaranteed by the United States or its agencies; shares of <br />investment companies registered under the Federal Investment Company Act of 1940 <br />that receive the highest credit rating, are rated in one of the two highest rating categories <br />by a statistical rating agency, and all of the investments have a final maturity of 13 <br />months or less; general obligations rated “A” or better; revenue obligations rated “AA” or <br />better; general obligations of the Minnesota Housing Finance Agency rated “A” or better; <br />bankers’ acceptances of United States banks eligible for purchase by the Federal <br />Reserve System; commercial paper issued by United States corporations or their <br />Canadian subsidiaries, rated of the highest quality category by at least two nationally <br />recognized rating agencies, and maturing in 270 days or less; Guaranteed Investment <br />Contracts guaranteed by a United States commercial bank, domestic branch of a foreign <br />bank, or a United States insurance company, and with a credit quality in one of the top <br />two highest categories; repurchase or reverse purchase agreements and securities <br />lending agreements with financial institutions qualified as a “depository” by the <br />government entity, with banks that are members of the Federal Reserve System with <br />capitalization exceeding $10,000,000; that are a primary reporting dealer in U.S. <br />government securities to the Federal Reserve Bank of New York; or certain Minnesota <br />securities broker-dealers. <br /> <br />A schedule of the maturities and ratings of the City’s investments as of December 31, <br />2018 is as follows: <br /> <br />Investment Type Total Less Than 1 1 to 5 5 to 10 Rating <br />Negotiable Certificates of Deposit 4,473,395$ 723,000$ 3,520,801$ 229,594$ Not Rated <br />Federal Home Loan Mortgage Corporation 2,219,810 - 2,219,810 - AA+ <br />Municipal Bonds 1,803,865 - 1,803,865 - AA-/A1 <br />Money Market Funds 2,581,810 2,581,810 - - Not Rated <br />Minnesota Municipal Money Market (4M Fund) 3,876,455 3,876,455 - - Not Rated <br />Total Investments 14,955,335$ 7,181,265$ 7,544,476$ 229,594$ <br />Concentration Risk – This is the risk associated with investing a significant portion of <br />the City’s investment (considered 5% or more) in the securities of a single issuer. The <br />City places no limit on the amount the City may invest in any one issuer. <br /> <br />At December 31, 2018, the City had the following investments which individually <br />comprise more than 5% of the City’s total investments: <br /> <br />Percentage of <br />Amount Investments <br />Minnesota Municipal Money Market (4M Fund) 3,876,455$ 25.92% <br />