Annual Report PDF file 2009 - State of Illinois

NOTES TO FINANCIAL STATEMENTSJUNE 30, 2009 (CONTINUED)Note 2 (continued)Deposits, Investments, and Investment Riskinvestment vehicles used to seek capital appreciation andcurrent income by acquiring, holding, financing, refinancingand disposing of infrastructure investments and relatedassets. Infrastructure assets include various public works(e.g. bridges, tunnels, toll roads, airports, public transportationand other public works) that are made typically as a part of aprivatization initiative on the part of a government entity.A Commingled Fund is a kind of mutual fund or common trustfund which consists of multiple kinds of assets from severalaccounts combined together. ‘Commingling’ these separateassets mitigates risk for the trader through investmentdiversification and reduces the cost of managing eachaccount separately. Commingled funds are also called pooledfunds and Master Trusts.Concentration of Credit Risk and Credit Risk for InvestmentsThe portfolio is managed by professional investmentmanagement firms. These investment management firms arerequired to maintain diversified portfolios. Each investmentmanager must comply with risk management guidelinesindividually assigned to them as part of their investmentmanagement agreement. The Board did not have any singleissuer investment that exceeded 5% of the total net assets ofthe Board as of June 30, 2009 and 2008. The following tablepresents the quality ratings of debt securities held by ISBI asof June 30, 2009 and 2008:Moody’sQuality Rating 2009 2008$ $Government and agency obligationsU.S Government obligations andFederal agency obligations AAA 653,019,129 661,038,879AA 11,999,760 5,057,314A - 12,617,585BAA - 4,847,471B - 976,931Not rated - 167,507,521Total Government and agency obligations 665,018,889 852,045,701Foreign obligations AAA 7,009,777 8,105,833AA 3,433,768 3,578,088A - 12,247,911BAA 1,899,728 27,477,167BA 10,915,077 30,930,973B 7,765,165 10,807,260CAA 1,609,335 -C 604,240 -Not rated - 19,858,198Total foreign obligations 33,237,090 113,005,430Corporate obligations AAA 39,162,888 129,745,414AA 56,839,344 125,292,897A 209,758,077 132,759,541BAA 99,409,888 148,019,604BA 79,410,130 111,315,582B 132,204,912 280,234,046CAA 39,940,421 64,919,149CA 977,375 530,341C - 556,527Not rated 10,344,726 64,791,231Total corporate obligations 668,047,761 1,058,164,332ILLINOIS STATE BOARD OF INVESTMENT18