CCP 08-29-1994 - Laserfiche WebLink

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. . Clearly, the fund is not perfonning as w=ll as was anticipated. . Conversations with the brokerage have not given me any assurance that fund performance will relxJund to expected levels anytime in the near future. Additionally, paineWebber has recently rrade management changes with the Fund Advisor because of perfonnance issues with other funds managed by the Fund Advisor. Actions Taken Because of these perfonnance problems, I have today directed PaineWebber Investment Executive, John Hnastchenko, to redeem all of the City's Class D Short term US GoveI11ll'eIlt for Credit Unions shares at the end of the business clay. This action will result in net settlement proceeds of approximately $503,275 (est. 51,250 shares x $9. 82\ share) . Net interest incorre during the holding pericx:l of this investment will co=espondingly be reduced to approximately $3,275. I intend to reinvest the proceeds as follows: a.) $300,000 for three year 6.50% coupon Treaswy note rraturing 8\15\97. b.) $200,000 f= two year 6.125% coupon Treasury notes rraturing in 7\31\96. Three actions will result in an interest incane stream of $13,900 in . 1994; $31,900 in 1995; $27,767 in 1996 and $13,000 in 1997. The ccrnbined 1994 -1996 anticipated interest incane of $73,575 caTpares favorably with the original three year projection in addition to having 40% of the investment ($200,000) liquid after two years and overcaning an approximate 1% yield for the first eight rronths of 1994. The rederrption of these mutual fund shares will also bring the City's total investment in this p:>rtfolio catego:ry within the Investment Policy goal (15%) for this p:>rtfolio catego:ry and eliminate the need for the temporary p:>licy deviation frcm Council. .