20 NCAC 07 .0201. ELIGIBLE INVESTMENT SECURITIES

The following types of investment securities are eligible for pledging as security provided that the securities are currently eligible for investment by the depository and can be included at full value in the reserves of the depository:

(1)           Obligations of the United States of America;

(2)           Obligations of any agency or instrumentality of the United States of America if the payment of such obligations is fully guaranteed by the United States of America;

(3)           Obligations of the State of North Carolina, the N.C. Medical Care Commission, the N.C. Housing Finance Agency, the N.C. State Education Assistance Authority and the component institutions of the University of North Carolina;

(4)           Bonds or notes of any North Carolina local government or public authority issued with the approval of the Local Government Commission and not currently in default on payment of interest or principal of any of its bonds or notes;

(5)           General obligations bonds of other states whose full faith and credit are pledged to the payment of principal and interest thereof;

(6)           Bonds, notes and other direct obligations of the Federal Financing Bank, the Farm Credit System, the Federal Land Banks, the Federal Home Loan Banks, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, the Government National Mortgage Association, the Federal Housing Administration, the Farmers Home Administration, the United States Postal Service, the Export‑Import Bank, the International Bank for Reconstruction and Development, the International Finance Corporation, the Inter‑American Development Bank, the Asian Development Bank, the African Development Bank, and the Student Loan Marketing Association;

(7)           Bonds or notes of a housing authority established or to be established pursuant to Article 1, Chapter 157 of the General Statutes of North Carolina or issued by any public housing authority or agency in the United States, when such bonds and notes are secured by a pledge of an annual contribution to be paid by the United States government or any agency thereof, or bonds or notes which may be issued by a not‑for‑profit corporate agency of a housing authority secured by rentals payable pursuant to Section 23 of the United States Housing Acts of 1937, as amended;

(8)           Pre‑refunded bonds and bonds escrowed to maturity ‑ if the issuer shall have applied for and received a re‑rating of "AAA" by at least one nationally recognized rating service by reason of U.S. Government securities being escrowed with the trustee;

(9)           Special obligation bonds ‑ if they were originally rated "AAA" by reason of U.S. Government securities being escrowed with the trustee;

(10)         Prime quality commercial paper bearing the highest rating of at least one nationally recognized rating service and not bearing a rating below the highest by any nationally recognized rating service which rates the particular obligation;

(11)         Bills of exchange or time drafts drawn on and accepted by a commercial bank and eligible for use as collateral by member banks in borrowing from a federal reserve bank, provided that the accepting bank or its holding company either:

(a)           is incorporated in the State of North Carolina; or

(b)           has outstanding publicly held obligations bearing the highest rating of at least one nationally recognized rating service and not bearing a rating below the highest by any nationally recognized rating service which rates the particular obligations.

In case of questions, it is the responsibility of the depository to demonstrate that the security pledged does fulfill the requirements of this Rule.

 

History Note:        Authority G. S. 115C‑444(b); 147‑79; 159‑31(b);

Eff. August 1, 1980;

Readopted with Change Eff. February 1, 1982;

Amended Eff. April 1, 1994; June 1, 1984; November 1, 1983.