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CITY OF PEQUOT LAKES, MINNESOTA <br />NOTES TO THE BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2019 <br /> <br /> <br />32 <br />NOTE 2 DETAIL NOTES ON TRANSACTION CLASSES/ACCOUNTS (Continued) <br /> <br />Investment balances at December 31, 2019 are as follows: <br /> <br />Interest Fair S & P's Moody's Percent of <br />Deposit/Investment Rates Maturity Value Rating Rating Total <br />Money Market Funds 0.89 N/A 7,213$ N/R N/R 0.22 <br />U.S. Treasury Notes 1.63 < 1 year 49,996 N/R AAA 1.56 <br />2.25 - 2.50 1 - 5 years 255,559 N/R AAA 7.96 <br />Federal Home Loan Bank 2.37 - 2.87 6 - 10 years 149,984 AA+ AAA 4.67 <br />Federal Farm Credit Bank 2.00 1 - 5 years 79,620 AA+ AAA 2.48 <br />2.32 6 - 10 years 50,011 AA+ AAA 1.56 <br />Federal Home Loan Mortgage <br />Corporation Med Term Notes 2.00 < 1 year 40,020 AA+ AAA 1.25 <br />2.38 1 - 5 years 76,125 AA+ AAA 2.37 <br />Certificates of Deposits 1.85 - 2.85 1 - 5 years 767,150 N/R N/R 23.90 <br />2.20 - 3.00 6 - 10 years 621,153 N/R N/R 19.35 <br />Municipal Bonds 1.70 - 3.48 < 1 year 200,619 N/R - AA- N/R - AA3 6.25 <br />3.00 - 4.03 1 - 5 years 439,742 N/R - AA+ N/R - AA3 13.70 <br />2.38 - 3.85 6 - 10 years <br />472,885 AA+N/R 14.73 <br />Totals 3,210,077$ 100.00 <br /> <br />The investments of the City are subject to the following risks: <br /> <br /> Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Ratings are <br />provided by various credit rating agencies and where applicable, indicate associated credit risk as indicated in the table <br />above. Minnesota Statutes limit the City’s investments. <br /> <br /> Custodial credit risk is the risk that in the event of a failure of the counterparty to a transaction, a government will not be <br />able to recover the value of investment or collateral securities that are in the possession of an outside party. The City <br />does not have a formal investment policy to address custodial credit risk but typically limits its exposure by purchasing <br />insured or registered investments. <br /> <br /> Concentration Risk is the risk associated with investing a significant portion of the City’s investments (considered 5 <br />percent or more) in the investments of a single issuer, excluding U.S. guaranteed investments (such as treasuries), <br />investment pools and mutual funds. The City has no formal policy limiting the amounts that may be invested in any one <br />issuer. At December 31, 2019, the City’s concentration of credit risk is shown in the table above.