Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. The city shall mitigate credit risk by adopting a diversification strategy by diversifying its investment portfolios within the restrictions of state and federal law, including the following:
(A) The amount of money invested at any time by a local government or political subdivision in any one of the categories of investments authorized by KRS 66.480(1)(e), (f), (g), (k) and (l) shall not exceed 20% of the total amount of money invested by the local government;
(B) The amount of money invested at any one time by a local government or a political subdivision in the categories of investments authorized in KRS 66.480(1)(j), (k) and (l) of this section shall not, aggregately, exceed 40% of the total money invested;
(C) No local government of political subdivision shall purchase any investment on a margin basis or through the use of any similar leveraging technique; and
(D) At the time the investment is made, no more than 5% of the total amount of the money invested by the local government or political subdivision shall be invested in any one issuer unless:
(1) The issuer is the United States Government or an agency or instrumentality of the United States Government, or an entity which has its obligations guaranteed by either the United States Government or an entity, agency, or instrumentality of the United States Government;
(2) The money is invested in a certificate of deposit or other interest-bearing accounts as authorized by § 33.53(A)(1)(d), (e);
(3) The money is invested in bonds or certificates of indebtedness of this state and its agencies and instrumentalities as authorized in § 33.53(A)(1)(h); or
(4) The money is invested in securities issued by a state or local government, or any instrumentality or agency thereof, in the United States as authorized in § 33.53(A)(1)(i).
(Ord. 4, passed 4-20-21)