N.J. Admin. Code § 17:16-12.2

Current through Register Vol. 56, No. 24, December 18, 2024

Section 17:16-12.2 - Permissible investments

(a) Subject to the limitations contained in this subchapter, the Director may invest and reinvest the moneys of any eligible fund in global debt obligations provided that:

1. The obligor:

i. Is not in default as to the payment of principal or interest upon any of its outstanding obligations. Subsequent to purchase, if the obligor defaults, the obligations do not have to be sold; and

ii. Has a market capitalization or contributed capital of at least $ 100 million. Subsequent to purchase, if capitalization or contributed capital falls below $ 100 million, the investment does not have to be sold; and

2. The obligations have a credit rating of Baa3 or higher by Moody's Investors Service, Inc., BBB- or higher by Standard & Poor's Corporation, and BBB- or higher by Fitch Ratings, except that two of the three ratings is sufficient and one of the three ratings is sufficient if only one rating is available. If a rating for the obligations has not been obtained from the above services, the obligations may be purchased if the issuer rating meets the minimum rating criteria. Subsequent to purchase, if the ratings fall below the minimum rating for such obligations, they do not have to be sold, and they may be exchanged with obligations with credit ratings lower than the minimum rating if the obligations received in exchange are, on balance, similarly rated.

(b) Notwithstanding (a) above, the Director may only invest and reinvest the moneys of any fund classified as a Trust Fund and the State of New Jersey Cash Management Fund in global debt obligations that are payable as to both principal and interest in United States dollars. The moneys of the State of New Jersey Cash Management Fund may only be invested in global debt obligations with maturities of 25 months or less.

(c) Notwithstanding the restrictions in (a) above, the Director may invest and reinvest the moneys of any eligible Common Pension Fund in global debt obligations, collateralized notes and mortgages, non-convertible preferred stock, and mortgage-backed passthrough securities that do not meet the minimum credit ratings set forth in this section and N.J.A.C. 17:16-19.2, 40.2, and 58.2, respectively; provided, however, the aggregate market value of such investments shall not exceed eight percent of the combined assets of all of the Pension and Annuity Funds.

(d) Notwithstanding the restrictions in (a) above, the Director may invest and reinvest the moneys of any eligible Common Pension Fund in global debt obligations and non-convertible preferred stock of companies that do not meet the minimum market capitalization or contributed capital set forth in this section and N.J.A.C. 17:16-40.2, respectively; provided, however, the market value of such investments shall not exceed one percent of the combined assets of all the Pension and Annuity Funds.

(e) In addition to (a) above, the Director may:

1. Exercise the rights and conversion privileges of any security acquired under this subchapter; and

2. Retain any distribution received as a result of a corporate action, even if such distribution does not meet the requirements of this subchapter.

(f) Notwithstanding the restrictions in this subchapter, the Council may approve the purchase of global debt obligations on a case-by-case basis.

N.J. Admin. Code § 17:16-12.2

Amended by 50 N.J.R. 215(b), effective 1/2/2018