Permissible Investments

Permissible Investments. Any funds received from the sale of bonds, notes or certificates of indebtedness heretofore or hereafter sold by an Issuer, which are not immediately required for disbursement for the purpose for which issued (“Bond Funds”), may unless otherwise prohibited by law be invested by the proper authorities in the following investments: A. Certificates of Deposit or other interest bearing accounts issued by a qualified depository of the State of Mississippi as follows: 1. Qualified Depository of the State of Mississippi. A qualified depository of the State of Mississippi is a financial institution qualified by the State Treasurer as a depository in accordance with Section 27-105-5 of the Mississippi Code Annotated as amended. A list of qualified depositories is available from the State Treasurer. 2. Maturity. The certificate of deposit must mature or be redeemable by the holder on or prior to the date upon which such funds will be required for disbursements. 3. Interest Rate. Interest rates may be negotiated or determined by competitive bids. The interest rate on a certificate of deposit shall bear interest at a rate per annum not less than a simple interest rate numerically equal to the highest of: a. the discount rate of United State Treasury obligations of comparable maturity as published in the Wall Street Journal on the date of investment; b.the current rate of interest paid on certificates of deposit; or c. the bond equivalent yield paid on United States Treasury obligations of comparable maturity as published in the Wall Street Journal on the date of investment. Provided, however, that the proceeds from the sale of bonds issued pursuant to the joinder of supervisor’s districts of adjacent counties in establishing industrial enterprises as set out in 57-1-131 through 57-1- 145, Mississippi Code of 1972, or Chapter 3 of Title 57, Mississippi Code of 1972, may be invested in certificates of deposit issued by qualified depositories of the State of Mississippi bearing interest at any rate per annum which may be mutually agreed upon, but in no event shall said rate be less than the discount rate on United States Treasury obligations of comparable maturity. 4. Security. Said certificates of deposit shall be secured as otherwise required by applicable law. B. Direct United States Treasury Obligations guaranteed in full as to principal and interest by the United State of America, limited to the following: 1. U.S. Treasury Bills 2. U.S. Treasury Notes having remaining maturities of no more than eighteen (18) months unless a longer term is provided through compliance with Section 4 below. 3. U.S. Treasury Bonds having remaining maturities of no more than eighteen (18) months unless a longer term is provided through compliance with Section 4 below. C. United States Government Agency obligations having remaining maturities of no more than eighteen (18) months unless a longer term provided through compliance with Section 4, the principal and interest of which are fully guaranteed by the United States of America or an agency thereof, however, limited to the following: 1. Farm Credit System Financial Assistance Corporation Securities 2. Federal Home Loan Bank 3. Federal National Mortgage Association 4. Student Loan Marketing Association 5. Resolution Trust Corporation Note 1: All investments in United States Government Agency obligations may not exceed 50% in the aggregate of all Bond Funds invested for 30 days or more. Note 2: In no event shall the remaining maturity of any United State Government Agency obligation exceed 5 years. Note 3: Pools consisting of Federal Home Loan Mortgage Corporation (Freddie Mac) securities and/or Federal National Mortgage Association (Fannie Mae) mortgage backed securities are not permissible investments; however, such pools may be taken as collateral on deposits. D. Direct Security Repurchase Agreements and Reverse Direct Agreements of any federal book entry of direct United States Treasury obligations and United States Government Agency obligations guaranteed as to principal and interest; provided, however, the Issuer must make a finding in writing that a Reverse Direct Security Repurchase Agreement is in the Issuer’s best interest. Such finding must be spread upon the official minutes of the Issuer and provided to the State Treasurer. 1. Direct Security Repurchase Agreement. “Direct Security Repurchase Agreement” means an agreement under which the entity buys, holds for a specified time, and then sells back certain securities and obligations. 2. Reverse Direct Securities Repurchase Agreement. “Reverse Direct Securities Repurchase Agreement” means an agreement under which the entity sells and after a specified time buys back certain securities and obligations. 3. Dollar Limitation. At least eighty percent (80%) of the total dollar amount in all repurchase agreements by each Issuer at any one time shall be pursuant to contracts with qualified state depositories. 4. Maturity. The repurchase agreement shall mature or be redeemable prior the time funds will be needed for expenditure but in any event must have a term of 30 days or less. Funds received from the sale and redemption of bonds, notes, or certificates of indebtedness shall not be invested in securities of, or interest in, any open-end or closed-end management type investment company or investment trust, except that pursuant to 91-13-8, Mississippi Code of 1972, a bank trustee acting in a fiduciary capacity that is authorized to invest in direct obligations of the U.S. of America also may invest such public fund in securities of, or other interests in, an open-end or closed-end management type investment company or investment trust that meets the criteria set out in 91-13-8, Mississippi Code of 1972.