What are Available Assets?
Available assets are simply items that have a verified financial value that may be sold and converted into cash when the need for additional funds arises. Typically, the assets available for this type of quick conversion will be goods or property that has a demonstrated market value, and will not require a long period of time before a sale is executed. Here are some examples of the type of items that may be considered as available assets, and why it is a good idea to keep a few of these types of assets on hand. One of the most common types of available assets would be in the form of real estate. This would not include properties that are being actively used as living space by the owner or to house the business that is owned and operated by the individual. Instead, this would include such properties as undeveloped land, rental properties, or second homes such as a vacation home or interest in a time-share arrangement. Real estate is usually very easy to place on the market and realize a
Available assets are defined as investments that are not generally needed to meet daily operating needs or construction costs which are on the horizon. Should an issuer need to liquidate its assets to cover a failed CP rollover or VRDO tender, the reduction in the issuer’s liquidity position should not impair the issuer’s ongoing ability to meet its daily cash flow needs, including the payment of long-term debt obligations. In short, the liquidation and use of investments should not result in a liquidity crisis for the institution or municipality. Therefore, assets available for liquidity support should be above and beyond the assets needed to meet its daily ongoing obligations. Issuers should not have to delay the payment of obligations in the event of asset liquidation to meet tenders. In light of the cyclical nature of many portfolios, Standard & Poor’s analysis will start at the historically lowest asset point during the year to determine the level of excess liquidity available to
