In FY 2007, MPLT remitted $2,228,048 million to the general fund.
“The cumulative amount distributed to the CNMI general fund since inception in 1983 has been $37,765,578. This has occurred while growing the principal fund by $40,378,994 for the same time period,” the report stated.
MPLT is the investment arm of the Department of Public Lands.
The general fund’s annual return for 2007 was 12.6 percent as compared to the 2006 return of 1.2 percent, the report stated.
It added that the MPLT board of trustees has put a hold any new “economically targeted investments,” or ETI, in order to focus on recovering its loan to the Rota scholarship program in which legal action has taken place and a default judgment has been awarded to the agency.
MPLT said efforts are underway to recover this judgment.
According to the report, MPLT’s remaining economically targeted investment is a loan made to the Northern Marianas Housing Corp., which defaulted in 2007 when P.L. 10-29 and P.L. 12-27 were repealed.
MPLT negotiated a settlement agreement and collected $2.025 million in payment, the report stated.
“MPLT is currently managing these loans and attempting to recover its $8.9 million principal,” the report added. “Due to the collection uncertainty for this investment, a write-down of the value of $4 million was recognized by MPLT as of Sept. 30, 2006 and interest on this investment is being recognized based upon collections.”
The report stated that “it is because of the current status of the ETI program that no new ETI investments are being made.”
According to the report, MPLT’s board “modified its investment policy statement in 2006 to change the asset allocation in order to increase the portion to fixed income and correspondingly reduce the equity allocation.”
This was done to benefit the general fund, MPLT’s income beneficiary.
The report stated that “the reallocation of the investment assets to favor fixed income resulted in an increase in investment income of $607,726 in 2007 and $198,212 in 2006.”
