ANCHORAGE (AP) -- The portion of Permanent Fund money invested in Alaska certificates of deposit shrunk about 80 percent after a major bank decided not to renew the CDs.
The fund's Alaska CD portfolio totaled $29.5 million on Monday, compared to $149.2 million earlier this month. That's about as low a level as anyone can remember, said Jim Kelly, spokesman for the state's oil wealth savings account.
By policy, the Permanent Fund allocates no more than $300 million to Alaska CDs, one of the few direct investments the $24 billion fund makes in Alaska.
The fund also owns or holds the mortgage on some buildings, including its Goldbelt Building headquarters in Juneau, the Frontier Building in Anchorage and a Ketchikan shopping center. And at times, it might invest in the few Alaska-based public companies, Kelly said.
But the vast majority of Permanent Fund money is invested on Wall Street, in major bond markets and in Lower 48 real estate.
Wells Fargo Bank Alaska decided not to ''roll over,'' or renew, maturing one- or three-year CDs with the Permanent Fund because the bank is ''restructuring the process,'' said spokeswoman Elaine Junge.
Through the Permanent Fund Alaska CD program, banks can get big deposits from the Permanent Fund and pay it back later with interest. Some banks rely on the program to enhance their funds available for construction or other loans.
Wells Fargo values the CD program and probably will participate again, Junge told the Anchorage Daily News.
Kelly said the fund requires participating institutions to pay the current U.S. Treasury rate plus a small premium. At the beginning of this week that would equate to 2.62 percent on a one-year CD, Kelly said. Wells Fargo was able to find even cheaper money elsewhere, he said.
© 2017. All Rights Reserved. | Contact Us