The Department has activities that have the authority to invest excess cash resources. A description of those activities, the investments made and a listing of the outstanding investments follow. Although funds in the Chancery Development Trust Account and the Bosnia Federation Defense Fund are invested, because they are considered non-entity assets the investments for these funds are not shown in this section, but are described in Note 7, " Cash and Other Monetary Assets."
Treasury initially invests FSRDF receipts in special, non-marketable U.S. Government securities. These special-issue Certificates of Indebtedness mature on the following June 30. On June 30, the Treasury rolls over the Certificates of Indebtedness into special, non-marketable bonds, with maturities spread over 15 years and a yield equaling the average of all marketable Treasury securities. All securities are purchased and redeemed at par, regardless of market conditions. Interest is paid semi-annually on December 31 and June 30. Maturity dates on these securities range from FY 2005 through 2017, and interest rates range from 3.50% to 8.75%.
The Israeli-Arab Scholarship and Eisenhower Exchange Fellowship Program Trust Funds are invested in market-based securities, issued at either a premium or a discount, and are redeemable for par at maturity. The discounts and premiums on these investments are amortized over the life of the security using the effective interest method. Maturity dates on these securities range from FY 2005 to 2013; interest rates range from 3.25% to 7.875%.
Investments at September 30, 2004 and 2003, are summarized below (Dollars in Thousands). All investments are classified as Intragovernmental Securities.
| Par | Amortization Method |
Unamortized (Discount) |
Investments (Net) |
Market Value | |
|---|---|---|---|---|---|
|
Non-Marketable, Par Value: |
|||||
|
FSRDF Certificates of Indebtedness |
$ 3,812,351 | N/A | $ — | $ 3,812,351 | $ 3,812,351 |
|
FSRDF Special Bonds |
9,015,277 |
N/A | — |
9,015,277 |
9,015,277 |
|
Subtotal |
$12,827,628 |
$ — |
$12,827,628 |
$12,827,628 | |
|
Non-Marketable, Market Based: |
|||||
|
Israeli-Arab Scholarship, Notes |
4,277 | Interest | 42 | 4,319 | 4,409 |
|
Eisenhower Exchange Fellowship, Notes |
7,534 | Interest | (51) | 7,483 | 9,112 |
|
Middle Eastern-Weastern Dialogue Note |
5,771 |
Interest | 859 |
6,630 |
6,624 |
|
Subtotal |
$ 17,582 |
$850 |
$ 18,432 |
$ 20,145 | |
| Total Investments | $12,845,210 |
$850 |
$12,846,060 |
$12,847,773 |
| Par | Amortization Method |
Unamortized (Discount) |
Investments (Net) |
Market Value | |
|---|---|---|---|---|---|
|
Non-Marketable, Par Value: |
|||||
|
FSRDF Certificates of Indebtedness |
$ 2,576,177 | N/A | $ — | $ 2,576,177 | $ 2,576,177 |
|
FSRDF Special Bonds |
9,713,125 |
N/A | — |
9,713,125 |
9,713,125 |
|
Subtotal |
$12,289,302 |
$ — |
$12,289,302 |
$12,289,302 | |
|
Non-Marketable, Market Based: |
|||||
|
Israeli-Arab Scholarship, Notes |
4,277 | Interest | 111 | 4,388 | 4,689 |
|
Eisenhower Exchange Fellowship, Notes |
7,534 |
Interest | (51) |
7,483 |
8,172 |
|
Subtotal |
$ 11,811 |
$ 60 |
$ 11,871 |
$ 12,861 | |
| Total Investments | $12,301,113 |
$ 60 |
$12,301,173 |
$12,302,163 |
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