Broward Blog

Broward County Investment Portfolio Receives Top Standard & Poor’s Rating

July 26th, 2007

Standard & Poor’s Ratings Services has assigned the Broward County Investment Portfolio a “AAAf” fund credit quality and “S1+” volatility rating, making it the first County portfolio in the State of Florida to receive a top “AAAf/S1+” rating from Standard & Poor’s.

Standard & Poor’s credit quality and volatility ratings are based on analysis of a fund’s eligible portfolio investments and strategy, historical return volatility, and management. The “AAAf” credit quality rating signifies that the portfolio holdings provide extremely strong protection against losses from credit defaults. The “S1+” volatility rating signifies that the fund possesses extremely low sensitivity to changing market conditions, and a level of risk that is less than or equal to that of a portfolio comprised of the highest quality fixed-income instruments with an average maturity of one year or less.

The primary purpose of the Broward County Investment Portfolio is to provide safety, liquidity, and investment income for the County’s assets. Holdings are typically comprised of highly-rated securities, including money market instruments, investment-grade corporate debt, U.S. Treasury and Agency securities. The Portfolio uses the three-month T-Bill as its benchmark and strives to maintain duration of one year or less.

The portfolio’s investment adviser is the Revenue Collection Division of the Broward County Finance & Administrative Services Department, and the portfolio is governed in accordance with the Administrative Code of Broward County, Chapter 22, Part XIII, Sections 22.80 – 22.95. The Code lays out conservative instructions concerning investment procedures such as diversification, maturities, security selection, internal controls, repurchase agreements, insurance, and reporting.

“We are very pleased to be the first county in the State of Florida to receive this prestigious rating on our investment portfolio from Standard & Poor’s,” said Michael Geoghegan, Director of Broward County’s Finance & Administrative Services Department. “It is a tribute to the sound management of the Revenue Collection Division and to the professional expertise of our in-house investment coordinators Stephen Farmer and Lori Fortenberry. The County’s primary objectives for its investment portfolio are safety, liquidity and return and to have received the highest possible rating from Standard & Poor’s confirms that we are on the right track.”

Standard & Poor’s seven-category credit quality rating scale ranges from “AAAf” (highest level of protection) to “CCCf” (least protection). Ratings may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. Volatility ratings range from “S1” (lowest volatility) to “S6” (highest volatility. A plus (+) sign is used to indicate the fund’s extremely low sensitivity to changing market conditions.

As of June 30, 2007, the Broward County Investment Portfolio had assets of approximately $2.5 billion.

Standard & Poor’s Fund Ratings represent an opinion only, not a recommendation to buy or sell.

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