N.J. Admin. Code § 17:16-40.2

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

Section 17:16-40.2 - Permissible investments

(a) Subject to the limitations contained in this subchapter, the Director may invest and reinvest the moneys of any eligible fund in non-convertible preferred stock provided that:

1. The stock is traded on a securities exchange or the over-the-counter market or issued through a private placement;

2. The company 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

3. The stock has 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. Subsequent to purchase, if the ratings fall below the minimum rating for such securities, they do not have to be sold, and they may be exchanged with securities with credit ratings lower than the minimum rating if the securities received in exchange are, on balance, similarly rated.

(b) 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 N.J.A.C. 17:16-12.2 and 19.2, this section, and N.J.A.C. 17:16-58.2, 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.

(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 and non-convertible preferred stock of companies that do not meet the minimum market capitalization or contributed capital set forth in N.J.A.C. 17:16-12.2 and this section, 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.

(d) Notwithstanding the restrictions contained in this subchapter, the Council may approve the purchase of non-convertible preferred stock on a case-by-case basis.

N.J. Admin. Code § 17:16-40.2

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