Investment Policy

Purpose

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 the 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.

Measurement. 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 the 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.

Review Schedule

The Board will review investment performance on an annual 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.

Approved on August 5, 2014 and amended on December 19, 2017

Investment of Funds and Accounts Held by the Trustee

The 1978 and 1979 General Bond Resolutions

Funds of the New Hampshire Municipal Bond Bank held in accordance with the terms of its General Bond Resolution adopted December 1, 1978, as amended (the “1978 Resolution”), and its General Bond Resolution adopted July 19, 1979, as amended (the “1979 Resolution”), shall be invested by the trustee in accordance with the provisions of each respective General Bond Resolution, as instructed by the Executive Director. The provisions of the 1978 and 1979 Resolutions governing the investment of funds held thereunder are summarized below:

Moneys in the General Fund (and each of the Accounts therein) and the Reserve Fund shall, as nearly as may be practicable, be invested either by the Bank or by the Trustee upon direction of the Bank in writing, signed by an Authorized Officer (which direction shall specify the amount thereof to be so invested and the Bank in issuing such direction shall take into consideration the dates and times when moneys in such Account will be required for the purposes of this Resolution), to the extent permitted by law, in

(a) direct obligations of the United States of America or direct obligations of the State or obligations for which the faith and credit of the United States of America or the State is pledged to provide for the payment of principal and interest,

(b) any bond, debenture, note, participation or other similar obligation issued by the Federal National Mortgage Association to the extent such obligations are guaranteed by the Governmental National Mortgage Association, and

(c) any other obligation of the United States of America or any Federal agencies which may then be purchased with funds belonging to the State or held in the State treasury.

The maturity or redemption date at the option of the holder of any such investment of moneys in the General Fund and the Reserve Fund shall coincide as nearly as practicable with the times at which moneys in the General Fund (and each of the Accounts therein) and the Reserve Fund will be required for the purposes in this Resolution provided.

In lieu of the investment of moneys in obligations described above, the Trustee shall upon direction of the Bank in writing, signed by an Authorized Officer, deposit moneys from any fund or account held by the Trustee under the terms of this Resolution, in, to the extent permitted by law, interest-bearing deposits, or shall make other similar banking arrangements, with a state or federally chartered banking institution within the State or a national bank within The Commonwealth of Massachusetts or such other bank or trust company, including itself, as may from time to time be a lawful depository for funds belonging to the State or held in the State treasury, the deposits of which are insured by the Federal Deposit Insurance Corporation or other Federal equivalent or savings bank equivalent; provided further, that each such interest-bearing deposit or other similar banking arrangement shall permit the moneys so placed to be available for use at the times provided with respect to the investment or reinvestment of such moneys ; and provided, further, that all moneys in each such interest-bearing deposit or other similar banking arrangement shall be continuously and fully secured by direct obligations of the United States of America or of the State or the Bank or obligations for which the faith and credit of the United States of America or the State is pledged to provide for the payment of principal and interest, of a market value equal at all times to the amount of the deposit or of the other similar banking arrangement.

Defined terms used herein and not otherwise defined shall have the meanings given to such terms in the Bond Bank’s General Bond Resolution adopted December 1, 1978, as amended.

The 2005 Resolution

Funds of the New Hampshire Municipal Bond Bank held in accordance with the terms of its General Bond Resolution adopted July 14, 2005 as amended (the “2005 Resolution”) shall be invested by the trustee in accordance with the provisions of the 2005 Resolution, as instructed by the Executive Director. The provisions of the 2005 Resolution governing the investment of funds held thereunder are summarized below:

Investment of Funds and Accounts Held by the Trustee. (1) Moneys in the General Fund (and each of the Accounts therein) and the Reserve Fund shall, as nearly as may be practicable, be invested either by the Bank or by the Trustee upon direction of the Bank by telephone confirmed in writing, signed by an Authorized Officer (which direction shall specify the amount thereof to be so invested and the Bank in issuing such direction shall take into consideration the dates and times when moneys in such Account will be required for the purposes of this Resolution), in Investment Securities The maturity or redemption date at the option of the holder of any such investment shall coincide as nearly as practicable with the times at which monies in the General Fund (and each of the Accounts therein) and the Reserve Fund will be required for the purposes in this Resolution provided.

The investment of monies in the General Fund (and each of the Accounts therein) and the Reserve Fund shall only be invested in the manner as permitted for investment of funds belonging to the State or held in the State treasury unless otherwise permitted by law.

In addition, the Bank may deposit moneys from any fund or account held by the Trustee under the terms of this Resolution, in, to the extent permitted by law, interest-bearing deposits, or shall make other similar banking arrangements, with a state or federally chartered banking institution or with such other bank or trust company, including itself, as may from time to time be a lawful depository for funds belonging to the State or held in the State treasury, the deposits of which are insured by the Federal Deposit Insurance Corporation or other Federal equivalent or savings bank equivalent; provided further, that each such interest-bearing deposit or other similar banking arrangement shall permit the moneys so placed to be available for use at the times provided with respect to the investment or reinvestment of such moneys.