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| MI Community Deposit Investment Program |
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November 14, 2006
The MI Community Deposit Investment Program, or MiCD, is an innovative and efficient way to invest in the State of Michigan time deposits. The program is designed to provide approved financial institutions the opportunity to compete for State of
Michigan investment dollars. The State of Michigan will offer up for bid $25 million in six (6) month time deposits and $25 million in twelve (12) month time deposits.
The auction will begin at 9:00 a.m. and end at 11:00 a.m. Eastern Time on November 14, 2006. Bids will be accepted via facsimile at (517) 324-2464 or email at MICD@michigan.gov. The settlement date for the funding will occur on the third business day following the auction or as soon as the collateral has been
deposited and confirmed. The Michigan Department of Treasury, Bureau of Investments (BOI) will make funds available as provided within these guidelines below.
MI Community Deposit Guidelines Check List:
Forms
Approved State Depository
To participate in the MI Community Deposit Investment Program the requirements
are:
To participate in this program, financial institutions must:
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Complete the following documents and submit to the BOI by 5:00 p.m. Eastern
Time on November 9, 2006:
Completed Depository Agreement
Completed Security Agreement
Copy of the financial institution's latest FDIC Call Report
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Set up a safekeeping account for the
collateral by November 9, 2006.
- Completed
Bid Form 1(a) six (6)
month time deposits and/or
Bid Form 1(b) twelve
(12) month time deposits
Bid Requirements
- The minimum bid is $100,000. Bids may increase in increments of $100,000 to a maximum of $3,000,000 per financial institution.
- The minimum rates will be equivalent to the current six (6) month U.S.
Treasury Bill yield (for the six (6) month time deposits) and the current twelve
(12) month U.S. Treasury Note yield (for the twelve (12) month time deposits) on
November 14, 2006. Bids below the minimum rate will not be accepted.
- Multiple bids from the same bidder are permissible. Each bidder may make up to
five bids, the total of which may not exceed $3,000,000 per financial
institution per auction.
- Settlement date is November 17, 2006, or as soon as the collateral has been
transferred and verified by the BOI.
- The maturity date will be 181 days from the disbursement date for the six (6)
month time deposits and 365 days from the disbursement date for the twelve (12)
month time deposits.
- If qualified bids submitted by different bidders result in a tie, the first
bid submitted prevails.
- The results of the Michigan CD Program will be posted on the State of
Michigan's Web site at www.michigan.gov/MICD by the close of business on
November 14, 2006.
Collateral Requirements
- Certificates of deposit in excess of insurance coverage by the federal
government must be collateralized pursuant to Act 105 of 1855, MCL 21.143.
- The amount of collateral required on state funds should equal at least 110% of
any time deposits over the federally insured amount required to secure both
demand and time deposits of the State held at the financial institution. The
State Treasurer shall determine the value of the collateral.
- For a LIST OF ACCEPTABLE SECURITIES for collateralization please see Michigan
Treasury Bulletin number BT10001 (Attachment 5).
The following steps are recommended by the BOI:
- Determine the amount of collateral needed.
- If you do not have an existing account to store collateral with the state's
safekeeping agent, contact Sue Kohagen at the Bureau of Investments at (517)
373-8161.
- Transfer the approved collateral to the custodial bank . Disbursement will be
made upon receipt of the collateral.
Time Deposit Requirements
- Interest on the certificate of deposit will be calculated on a 360 per diem
basis using the actual number of days ((principal amount times the rate) divided
by 360 multiplied by the actual number of days).
- Time deposits will be book-entry in the name of the State Treasurer, State of
Michigan.
- Transactions will be completed by wire transfer, which will include principal
and interest collections. The wiring instructions will be included on a maturity
notice issued by the BOI.
- No state money shall be deposited in any financial institution in excess of
50% of the net worth of the financial institution, pursuant to Act 105 of 1855, MCL 21.143.
Additional Conditions
The State reserves the right to reject any and all bids,
and to waive any irregularity or informality with respect to any bid.
-
A bidder submitting a winning bid is irrevocably obligated to provide the time
deposit at the specified rate, amount, and maturity, if acceptable to the BOI,
as herein set forth. The bidder understands that an award has not been made
until contacted by the BOI. Discrepancies should be reported to Sue Kohagen at
the Michigan BOI at (517) 373-8161 or (517) 335-5900.
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In the event of a system failure, the program will be attempted on the day of
the scheduled program between the hours of 1:00 p.m. prevailing Eastern Time and
3:00 p.m. prevailing Eastern Time. If the program is not completed on the
scheduled day, the next attempt will be from 9:00 a.m. to 11:00 a.m. prevailing
Eastern Time the next business day. The BOI will inform bidders of a change in
the bidding format via the website.
Disclaimer
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The BOI is not responsible for technical difficulties that result in the loss
of bidders' fax connection, slowness in transmission of bids, or other technical
problems. The BOI is not responsible for individual computer failures.
-
All references to Certificates of Deposits are synonymous with Time Deposits
as identified by the BOI.
Acceptance of Guidelines
Please contact us at:
Michigan Dept. of Treasury
Bureau of Investments
(517) 373-8161
Email: MICD@michigan.gov
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