Common use of Structure of Investments Clause in Contracts

Structure of Investments. 1. No more than 40% of loans outstanding at any time may be term loans. Any such term loans must have matched collateral investments. The weighted average term of a Fund’s lent securities cannot exceed thirty (30) days. The weighted average life of the Collateral Investment Pool for a Fund shall not differ from the weighted average term of the outstanding Loans by such Fund by more than 15 days. 2. To maintain liquidity, a minimum of 25% of a Fund’s collateral investments shall be invested on an overnight basis. 3. A loan which may be called back by the Lending Agent upon one day’s notice shall be deemed to have a maturity of one day. 4. A Money Market Fund shall be deemed to have a maturity of one day. 5. Repurchase agreements shall have an overnight maximum maturity. 6. All other fixed coupon securities shall have maturities of one year or less or shall be puttable to the issuer within one year. Floating rate securities and/or variable rate securities with reset dates shall be considered to have matured on the reset date; provided, however that no floating or variable rate security may have a final maturity of more than two years. The Lending Agent shall provide the Program Manager annually with a list of short-term indexes to be used for floating or variable rate securities. The Program Manager shall review the list and approve or delete indexes as it deems appropriate. The Lending Agent may invest in floating or variable rate securities where market values are reasonably expected to return to par at the time of an interest rate adjustment. Securities that are linked to more than one index, that float inversely to the underlying index, that have caps, or that do not have a consistent spread to the underlying index for the life of the security are prohibited without prior approval from the Program Manager.