Managing your corporate cash effectively is critical to your company’s bottom line. Maintaining the right amount of funds in the right place at the right time can help you increase earnings and reduce cost.
Merrill Lynch’s team of seasoned business professionals can help you design a cash management and investing solution to suit your company’s liquidity needs, investment timeline and risk tolerance. Through the Business Investor AccountSM, you can automatically sweep incoming cash into interest-bearing, FDIC-insured money market deposit accounts (MMDA).
Investment Guidelines
The following is a sample set of investment guidelines, for a corporation or other institution with a very low risk tolerance. These guidelines emphasize safety and liquidity above all other considerations.
Objectives:
- Preserve the principal value of the investment portfolio.
- Maintain liquidity to meet anticipated cash flows.
- Achieve the best available yields consistent with capital preservation and liquidity requirements.
Permissible Investments:
- Obligations issued or guaranteed by the U.S. Government, it's agencies or instrumentalities.
- Repurchase agreements collateralized by obligations issued or guaranteed by the U.S. Government, it's agencies or instrumentalities.
- Commercial paper rated A1 or P1 or better.
- Certificates of deposit, time deposits and bankers' acceptances from institutions with a short-term rates of A1 or P1 and/or a long-term rating of A1 or A1+, or better.
- Money market mutual funds whose investment policies and objectives closely match those listed above.
Diversification:
- No more than 10% of the portfolio or $5 million (whichever is less) shall be invested with any one issuer, with the exception of the U.S. Government and Agencies. A money market fund is by it's nature a diversified investment, and exempted from this requirement.
Maturity Restrictions:
- Maximum final maturity on an individual security not to exceed two years.
- No security shall be purchased with a final maturity beyond the expected need for the invested funds.
- Average duration of the portfolio shall not exceed six months.
- For variable rate securities, the reset date may be used for maturity restriction guidelines.
- For money market mutual funds which offer daily liquidity, the maturity will be calculated as one day.
Income:
- All dividends and interest earned will be reinvested.
Restrictions:
- This is a section which could include other constraints or requirements as appropriate to your institution or organization (e.g., social considerations).
Exceptions:
- The circumstances under which variations from this policy may be acceptable and the procedures to follow when an exception is desired should be outlined here.
Note: Please consult a ML Financial Advisor for a current prospectus on any mutual funds.
Before investing consider the investment objectives, risks and charges and expenses of these funds. This and other information may be found in the fund's prospectus, read the prospectus carefully before you invest or send money.
More Information
If you would like additional information regarding Investing Corporate Cash, please contact a ML Financial Advisor to obtain a current prospectus on any mutual funds and to obtain a copy of our weekly indicative rates.
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