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Kroll Bond Rating Agency Assigns AAAkf Fund Rating to Minnesota School District Liquid Asset Fund Plus MSDLAF+ Term Portfolio


Kroll Bond Rating Agency (KBRA) has assigned a AAAkf Fund Rating to the Minnesota School District Liquid Asset Fund Plus MSDLAF+ Term Portfolio. The AAAkf rating reflects the MSDLAF+ Term Portfolio’s Primary Quantitative Rating (PQR) as measured by the KBRA Funds Credit Quality Rating Matrix, which is based on the credit quality of the underlying instruments that comprise the portfolio. Additionally, the fund rating is influenced by the results of the qualitative assessment of the investment advisor, PFM Asset Management LLC (PFMAM). The qualitative shadow rating (QSR) for the fund was found to be strong.

The Minnesota School District Liquid Asset Fund Plus (“MSDLAF+”) was created in November 1984. MSDLAF+ is a joint powers entity in the form of a common law trust under the laws of the State of Minnesota. MSDLAF+ is designed to permit Minnesota School Districts to pool their investment funds to seek the highest possible investment yield, while maintaining liquidity and preserving capital. Fund documents permit and provide for the creation of specialized asset portfolios within the MSDLAF+ structure. This allows MSDLAF+ to offer portfolios designed to meet specific investment objectives and needs of those participating. Currently, MSDLAF+ offers two portfolios: the MSDLAF+ Portfolio, which has two share classes, including the Liquid Class and MAX Class; and the MSDLAF+ Term Portfolio, which can have multiple series with staggered maturity dates.

The MSDLAF+ Term Portfolio is a fixed rate investment with an investment strategy designed to match the cash flow requirements of investors with the cash flows from the portfolio. The MSDLAF+ Term Portfolio investment objective is to provide an investment subject to preset redemptions occurring from 60 days to one year that will produce the highest earnings consistent with maintaining principal at maturity and meeting the redemption schedule. The MSDLAF+ Term Portfolio seeks to return principal on the planned maturity date. There may be a penalty for early withdrawal and the NAV may fluctuate prior to maturity.

To meet the investment objective, PFMAM must abide by certain investment restrictions. The portfolios only purchase U.S. dollar denominated instruments, and the investment advisor will invest in a security only if they are satisfied that credit risk of that instrument is appropriate. Permitted investments include, but are not limited to, U.S. Government debt, repurchase agreements, commercial paper, and bank obligations.

PFMAM is the investment advisor and a member of the PFM Group. The Harrisburg, PA-based manager has been providing investment advice and portfolio management services to a broad group of government and not-for-profit organizations, corporations, pension funds and other institutions since 1980. As of year-end 2016, PFMAM reported total assets under management and advisement of $112.3 billion, with discretionary assets under management representing $70.9 billion of that total.

The ratings are based on KBRA’s Global Investment Funds Rating Methodology published on August 10, 2016.

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About Kroll Bond Rating Agency

KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).

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