At June 30, 2020 and 2019, the Authority’s investments were rated as follows: Credit Exposure as a % of Total Investments Investment Type US Agencies US Treasuries* LGIP*** Commercial Paper LGIP-EM*** Mutual Funds*** Virginia State and Local** Total Investments S&P Rating AA+ AA+ AAAm P1 AAAm AA+ AA+ * Backed by the full faith and credit of the US government. ** Ratings vary by security. *** Reflected on the accompanying financial statements as cash equivalents. Concentration of credit risk: Concentration of credit risk is the risk of loss attributed to the magnitude of investments held from a single issuer. The Authority’s guidelines place limits on the amounts the Authority may invest in certain issuers, however, the Authority seeks to maintain at least 15% of the portfolio in US Treasuries and the balance of its investments in other authorized notes, bonds, securities and deposit accounts. The Authority’s investment portfolio as of June 30, 2020 and 2019 is concentrated in securities issued by the US Treasury, the Federal Home Loan Bank (FHLB), the Federal Farm Credit Bank (FFCB) and prime quality commercial paper of US corporations. The obligations of each of these issuers comprise more than 5% of the Authority’s total investments. The Authority categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. All of the Authority’s investments are valued using Level 1 inputs. The table below details the fair value and percent of total investments for each issuer representing 5% or more of the Authority’s total investments as of June 30, 2020 and 2019: Issuers Over 5% of Total Investments (Restricted & Unrestricted) US Treasuries FHLB FFCB Commercial Paper Others below 5% Total Investments Fair Value of Investments (Level 1) 2020 $ 88,433,470 80,136,964 72,983,121 28,995,461 5,343,840 $ 275,892,856 2019 $ 180,494,690 72,824,399 33,848,422 41,263,666 2,769,983 $ 331,201,160 % of Total Investments 2020 2019 32.1% 29.0 26.5 10.5 1.9 100.0% 54.5% 22.0 10.2 12.5 0.8 100.0% Custodial credit risk: Custodial credit risk is the risk that the Authority will not be able to recover the value of its investments or collateral securities that are in the possession of an outside custodial party. All of the securities purchased by the Authority are held in safekeeping by a third party custodial bank or institution and are insured in the Authority’s name, and therefore, the Authority is not exposed to custodial credit risk. Moody’s Rating Aaa Aaa N/A A1 N/A Aaa Aaa 2020 42.9% 24.8 11.0 8.0 7.4 4.4 1.5 100.0% 2019 30.5% 51.7 1.6 11.8 0.0 3.6 0.8 100.0% 44 FINANCIAL SECTION NOTES TO FINANCIAL STATEMENTS
Prince William County Service Authority | 4 County Complex Court Woodbridge, VA 22192
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