ANNAPOLIS (April 23, 2010) – Maryland State Treasurer Nancy K. Kopp announced that the Maryland Local Government Investment Pool (MLGIP), established in 1982 to provide all local governments an investment vehicle for short-term investment of funds, received an AAAm rating from Standard & Poor’s, as it has since 2000
The highest rating available for principal stability funds, AAAm signifies “extremely strong” ability to maintain stability of invested principal and minimize exposure to principal losses due to credit risk. The State Treasurer’s Office administers the pool.
One of three major rating agencies in the country, Standard & Poor’s is the recognized provider of pool ratings.
The pool has more than $2.5 billion as of a recent accounting. Treasurer Kopp said, “While MLGIP is one of many options available to public finance officials throughout the state, I believe it is an excellent investment option. The AAAm rating clearly illustrates the sound, prudent management of this pooled fund.”
“The rating allows all fund managers to know that their funds are in a safe investment vehicle and earning a market rate of return. The fact that the pool is recognized as an AAAm fund is prestigious and complements the state's AAA bond rating, showing that the state is doing the right thing with the public funds entrusted to the pool,” Treasurer Kopp said.
MLGIP uses a pooled fund strategy that entails the creation of a money market fund for municipalities, including, towns, cities and counties, as well as boards of education, community colleges, public libraries, registers of wills, volunteer fire companies and various state and county agencies.
The investment objectives are: preserve the capital value of the dollars invested, provide a competitive rate of return and provide a readily available source of daily funds. The pool comprises any funds that a Maryland governmental entity wants to deposit.
For some entities, it is their operating funds, for others it may include some capital money. While the pool was designed to be a safe, short-term alternative, many entities use it for some of their longer term funds.
MLGIP invests in short-term US Treasury obligations, federal agency paper, banker acceptances, commercial paper, corporate notes, other money market funds and repurchase agreements collateralized by US treasuries.
Source: Maryland State Treasurer’s Office