§ 2-500. Definitions.

When used in this division, the following words, terms or phrases shall have the meanings ascribed to them in this section unless the context clearly indicates otherwise:

Agencies. Federal agency securities.

Bankers' acceptance. A draft or bill or exchange accepted by a bank or trust company. The accepting institution guarantees payment of the bill, as well as the issuer.

Certificate of deposit (CD). A time deposit with a specific maturity evidenced by a certificate. Large-denomination CD's are typically negotiable.

Collateral. Securities, evidence of deposit or other property which a borrower pledges to secure repayment of a loan.

Counterparty. A party, other than the city, to a hedge agreement.

Diversification. Dividing investment funds among a variety of securities offering independent returns.

Hedge agreement. An interest rate exchange agreement, an interest rate agreement, forward purchase contract, put option contract, call option contract or other financial product, any of which is used by the city as a hedging device, entered into between the city and a counterparty; provided that such counterparty shall be an entity whose long-term debt obligations, or whose payment obligations under the hedge agreement are guaranteed by an entity whose senior long-term debt obligations, in either case are rated (on the date the hedge agreement is entered into) by at least two (2) nationally recognized rating agencies in a rating category not less than double-A category without regard to gradations.

Interest rate agreement. An agreement between the city and a counterparty under which the city is obligated to make periodic payments on a "notional amount" to the counterparty and the counterparty is obligated to make periodic payments to the cityon such "notional amount" on a different basis or formula, and under which the amounts so payable by the city and such counterparty on any date are netted against each other with the party owing the larger amount making a net payment to the other party.

Liquidity. A liquid asset is one that can be converted easily and rapidly into cash without a substantial loss of value.

Market value. The price at which a security is trading and could presumably be purchased or sold.

Master repurchase agreement. A written contract covering all future transactions between the parties to repurchase agreements that establishes each party's rights in the transactions. A master repurchase agreement will often specify, among other things, the right of the buyer-lender to liquidate the underlying securities in the event of default by the seller-borrower.

Maturity. The date upon which the principal or stated value of an investment becomes due and payable.

Portfolio. Collection of securities held by an investor.

Repurchase agreement (REPO). Securities sold to an investor by the holder with an agreement to repurchase them at a fixed price on a fixed date. The security "buyer," in effect, lends the "seller" money for the period of the agreement, and the terms of the agreement are structured to compensate the "buyer" for this.

Safekeeping. A service to customers rendered by banks for a fee whereby securities are held in the bank's vaults for protection.

SBA. The Florida Local Government Surplus Funds Trust Fund; the aggregate of all funds from political subdivisions that are placed in the custody of the state treasurer for investment and reinvestment.

(Ord. No. 95-44, § 1, 12-19-95; Ord. No. 2003-35, § 1, 12-2-03)