THE SHORT ANSWER
Florida PRIME gives Florida issuers daily liquidity and amortized-cost reporting as of its June 30, 2026 disclosures, and a yield that floats with short-term rates; the pool documents reviewed say nothing about bond proceeds or arbitrage. A competitively bid GIC, flex repo or Treasury portfolio is priced to the issue's own draw schedule instead. Which earns more depends on the bids received, and bond counsel decides what each fund's documents permit.
Whether a Florida issuer should keep bond proceeds in Florida PRIME depends on what the fund needs: the pool supplies daily liquidity, amortized-cost reporting and a yield that floats with short-term rates, while a competitively bid investment is priced to the issue's own draw schedule and term.
Which structure earns more on a given issue is decided by the bids the market returns on the day of solicitation, not by any rule that favors one over the other.
This page covers what Florida PRIME is, how its yield is set, what its documents do and do not say about arbitrage, how its liquidity compares with a draw-matched agreement, and where each structure fits.
What an issuer's own bond documents permit for each fund is a determination for its bond counsel and tax counsel.
What is Florida PRIME and who can invest?
Florida PRIME is Florida's local government investment pool, operating under Chapter 218, Part IV, of the Florida Statutes (the Investment of Local Government Surplus Funds Act), administered by the State Board of Administration and managed by Federated Hermes, per the program's enrollment materials.
Its stated objectives, in priority order, are safety, liquidity and competitive returns; participation requires an Authorizing Resolution and a Disclosure Statement, and the program is also governed by Florida Administrative Rule 19-7.
It is one of the local government investment pools that state governments operate for their political subdivisions.
Eligibility runs by entity type: state agencies, state universities and colleges, counties, cities, special districts, school boards and other direct-support organizations of Florida may open accounts.
The pool's home page reported more than 860 participants and about $27 billion in public funds as of June 30, 2026, and its June 30, 2026 financial statement disclosures state a rating of AAAm from S&P.
The same disclosures state that the pool meets all the necessary criteria under GASB 79 to elect amortized-cost measurement, so participants should report their Florida PRIME balances at amortized cost, and the disclosures state a weighted average maturity of 53 days and a weighted average life of 83 days as of June 30, 2026.
For Florida local governments generally, section 218.415, Florida Statutes, requires investments to follow a written investment plan adopted by the governing body, or the narrower list in subsection (17) where there is no policy, with safety of capital, liquidity and investment income as the objectives in that order.
With a written policy, section 218.415(16) lists where the government's funds may be invested, and the Local Government Surplus Funds Trust Fund or an interlocal pool appears among the listed options.
That policy requirement carries a carve-out that matters here: under section 218.415(1), the investment policy does not apply to pension funds or to funds related to the issuance of debt where other existing policies or indentures are in effect for those funds, and whether a particular bond fund falls within that carve-out is a determination for bond counsel.
The full statutory list, and how it treats debt-related funds, is on the Florida permitted investments page.
How is Florida PRIME's yield set, and how has it moved?
The pool's yield is not contracted in advance: it comes from the short-duration portfolio Federated Hermes manages, and it moves as short-term market rates move.
The State Board of Administration publishes the pool's NAV, its 1-, 7- and 30-day SEC yields, and daily and weekly liquidity figures on the Florida PRIME home page, with monthly summary reports alongside; this page prints none of those figures because they change.
The portfolio is short-dated: its June 30, 2026 disclosures state a weighted average maturity of 53 days and a weighted average life of 83 days.
A fixed-rate investment behaves differently: the rate a competitively bid GIC pays is fixed on the solicitation date and holds for the contract term, as covered in how GIC rates are set.
Comparing the two structures therefore starts with today's reinvestment rates and ends with bids for the fund's own schedule.
How are arbitrage and rebate handled for proceeds held in a pool?
The enrollment materials and the June 30, 2026 financial statement disclosures reviewed for this page do not address bond proceeds or the federal arbitrage rules, so they say nothing about an individual issue's arbitrage yield, rebate computation or spending exceptions.
That silence leaves the analysis with the issuer: whether pool earnings stay under the issue's arbitrage yield, and what the arbitrage rebate rules require for those earnings, is worked through by the issuer's rebate analyst or tax counsel from the issue's own records.
In a competitive solicitation the documents are issue-specific instead: the bid specifications state the fund's expected draws, and the provider's certifications are delivered to bond counsel, as the post-bid certifications page describes.
Liquidity: same-day access vs a draw-matched agreement
Florida PRIME gives daily access to the whole balance, while a draw-matched agreement gives liquidity only as its withdrawal schedule provides; the pool's June 30, 2026 disclosures state that no redemption fees, maximum transaction amounts or other requirements limited a participant's daily access to 100 percent of account value.
That access has a statutory override: under section 218.409(8)(a), Florida Statutes, the SBA's executive director may limit contributions or withdrawals for 48 hours after a material liquidity event, and the trustees may extend the limitation for up to 15 more days.
Section 218.409(4) also authorizes early-withdrawal penalties if they are disclosed in the enrollment materials, and the reviewed disclosures state that at present no such disclosure has been made.
A GIC works the other way around: withdrawals follow the contract's schedule, sized to the draws the bid stated, and early or unexpected draws are governed by the contract's withdrawal provisions.
The intermediate structures exist for funds whose draws are less certain: a full-flex repurchase agreement is built so the issuer can pull funds as draws require, and a structured Treasury portfolio ladders maturities to the schedule, with a money-market allocation for faster-than-expected spend-down.
The comparison, then, is between daily access to the entire balance and a schedule matched to the draws the fund expects.
When a GIC, flex repo or Treasury portfolio beats Florida PRIME
The structural case for bidding arises when a fund has a known term and a draw schedule the issuer can state with confidence, because the solicitation asks providers to price that specific schedule rather than a general short-duration portfolio.
Whether the resulting bids yield more than the pool would have over the same period is decided by the bids themselves, not by the structure.
| Dimension | Florida PRIME | Competitively bid investment |
|---|---|---|
| Rate | Floating; SEC yields published by the SBA | Set by competitive bids on the solicitation date |
| Term | Open-ended; funds stay until withdrawn | Contract term matched to the fund |
| Liquidity | Daily access to 100 percent of account value as of June 30, 2026, subject to the section 218.409(8)(a) gate | Withdrawal schedule written into the contract |
| Arbitrage documentation | Reviewed pool documents are silent on arbitrage and are not issue-specific | Bid specifications and provider certifications are issue-specific |
| Setup | Authorizing Resolution and Disclosure Statement | Solicitation, bid comparison and closing |
Florida's statutes assume a competitive process where they reach: section 218.415(12) requires a covered investment policy to direct staff to competitively bid securities when feasible and appropriate, and to select the bid that best meets the policy's investment objectives unless law requires otherwise.
The statute's standard is fit with the investment objectives, not the highest quoted rate, and the carve-out in section 218.415(1) determines whether a bond fund is covered at all.
For repurchase agreements, section 218.415(11) requires a Florida investment policy to provide that every approved institution and dealer transacting repos execute and perform under the Master Repurchase Agreement.
Florida also requires the officials responsible for investment decisions, or the CFO, to complete 8 hours of investment continuing education each year under section 218.415(14).
The broader tradeoff between a state pool and a bid investment is worked through in LGIP vs GIC.
Using both: pool for near-term draws, bid the rest
The two structures are complements rather than substitutes: the pool holds what the fund will spend soon, and a bid investment holds the balance for the term, where the fund's documents permit each.
If proceeds already sit in Florida PRIME, the direct test is to compare your pool yield with real bids rather than to reason about the choice in the abstract.
mGIC is an independent, SEC-registered municipal advisor and Bidding Agent: it sells none of the investments discussed here, does not act as principal, and is paid by the winning provider rather than the issuer.
You can request a no-obligation reinvestment review for a fund's own schedule, or follow Treasury yields, SOFR and SLGS each business day through the daily rate-update emails.
Which investments a fund's indenture and tax certificates permit, and how the arbitrage rules treat its earnings, are determinations for bond counsel and tax counsel.
Frequently asked questions
Does Florida PRIME accept bond proceeds?
Eligibility runs by entity type, and the enrollment materials and June 30, 2026 disclosures reviewed for this page do not address bond proceeds or arbitrage. Whether a particular bond fund may be placed in the pool is a question for bond counsel, reading the fund's own documents.
Who manages Florida PRIME?
The State Board of Administration administers the pool and Federated Hermes manages the portfolio, under Chapter 218, Part IV, Florida Statutes, and Florida Administrative Rule 19-7.
Where is Florida PRIME's current yield published?
The SBA publishes the pool's NAV, 1-, 7- and 30-day SEC yields, and daily and weekly liquidity figures on the Florida PRIME home page, with monthly summary reports alongside.
Can Florida PRIME limit withdrawals?
Under section 218.409(8)(a), Florida Statutes, the SBA executive director may limit contributions or withdrawals for 48 hours after a material liquidity event, and the trustees may extend the limit for up to 15 more days. As of June 30, 2026, no redemption fees, maximum transaction amounts or other requirements restricted daily access to 100 percent of account value.
Does Florida law require competitive bids for bond-proceeds investments?
Where section 218.415(12) applies, it requires the investment policy to direct staff to competitively bid securities when feasible and appropriate, and to select the bid that best meets the policy's investment objectives unless law requires otherwise. Section 218.415(1) carves funds related to the issuance of debt out of the policy requirement where another existing policy or indenture is in effect for them.
How is Florida PRIME rated?
The pool's June 30, 2026 financial statement disclosures state a rating of AAAm from S&P. Ratings can change, so the pool's current disclosure governs.
Sources
This page is general educational information about municipal finance and federal and state rules as of the date shown. It is not legal, tax or investment advice, and it is not a recommendation about any particular investment. Product availability, legality and suitability depend on the issuer, jurisdiction, governing documents and transaction-specific facts. Final legal and tax determinations remain with the issuer's bond counsel, tax counsel and other advisors.
