(a) Domestic Preferred Stock. Domestic preferred or guaranteed stock or shares of any institution created or existing under the laws of the United States or of any state, district or territory thereof or the District of Columbia; provided that:

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(1) All publicly held prior obligations and prior preferred stock, if any, of such institution at the date of acquisition are eligible as investments under §§ 8143 through
8160; and

(2) the net earnings of the institution available for fixed charges over a period of five (5) fiscal years next preceding the date of investment have averaged per year, and during either of the last two (2) years have been, after depreciation and after income taxes, no less than:

(A) two times its average annual fixed charges, maximum contingent interest and preferred dividend requirements over the same period, in the case of any public utility company; or

(B) three (3) times its average annual fixed charges, maximum contingent interest and preferred dividend requirements over the same period, in the case of any other company.

For purposes of this Subsection, the term preferred dividend requirements shall mean cumulative and noncumulative dividends on all preferred stock of the issuer, whether paid or not.

(b) Foreign Preferred Stock. Foreign preferred or guaranteed stock or shares of any institution created or existing under the laws of nations other than the United States which are not in default either as to principal or interest; provided, that the investment agent in its informed opinion, determines that such an investment would be employed by a prudent person acting in a like capacity and familiar with such matters would use in the investment of a fund of like character and with like aims.

(c) Limitations:

(1) No investment shall be made in any one issue described in Item (1) of Subsection (a) of this Section in an amount in excess of ten percent (10%) of such issues.

(2) No more than two percent (2%) of the Fund at cost shall be invested in the preferred stock of any one issuing domestic company.

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(3) No more than two percent (2%) of the Fund at cost shall be invested in the preferred stock of any one issuing foreign company.

(4) The aggregate of all investments authorized under this Section shall not exceed fifteen percent (15%) of Fund assets at cost.

(5) Preferred stock authorized under this Section may be purchased and held in investment funds authorized under
§ 8158, or in exchange-traded funds authorized under § 8158.1; such purchases shall be excluded from the
limitations of § 8158(e) and § 8158.1(b).

SOURCE: GC § 4225.13, as amended by P.L. 13-056 (Sept. 22, 1975); Repealed and reenacted by P.L. 22-006:4 (Mar. 29, 1993). Amended by P.L. 32-086:14 (Nov. 27, 2013).

2012 NOTE: Subsection designations were amended in subsection (a)(2) to adhere to the Compiler’s alpha-numeric scheme in accordance with the authority granted by 1 Guam Code Ann. § 1606.