This is a shocker, Reserve is the mother of money market
funds.
Reserve Primary Money Fund Falls
Below $1 a Share (Update1)Sept. 16 (Bloomberg) -- Reserve
Primary Fund, a money- market mutual fund with $64.8 billion in
assets as of Aug. 31, fell below $1 a share in net asset value
because of losses on debt issued by Lehman Brothers Holdings
Inc.
Investor redemptions will be delayed as long as seven days, the
fund's owner, Reserve Management Corp., said today in a statement.
Withdrawals requested before 3 p.m. New York time today will be
paid at $1 a share.Bruce Bent chairman of New York-based Reserve
Management, opened the first money-market mutual fund in 1970. The
only other money-market fund to inflict losses on investors was the
Community Bankers Mutual Fund in Denver, which liquidated in 1994
because of losses on interest-rate derivatives.
``This is uncharted territory,'' said Peter Crane, president of
Crane Data LLC in Westborough, Massachusetts, which tracks
money-market funds. ``That's certainly a stunner.''The fund held
$785 million in Lehman Brothers commercial paper and medium-term
notes. The fund's board revalued the Lehman holdings at $0
effective 4:00 p.m. Lehman filed for bankruptcy protection
yesterday.Bent often said the best money-market funds should be
``boring.'' He derided other funds that invested in securities
linked to subprime mortgages and other risky debt.
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This is a shocker, Reserve
Posted by trade on 16th of Sep 2008 at 06:02 pm
This is a shocker, Reserve is the mother of money market funds.
Reserve Primary Money Fund Falls Below $1 a Share (Update1)Sept. 16 (Bloomberg) -- Reserve Primary Fund, a money- market mutual fund with $64.8 billion in assets as of Aug. 31, fell below $1 a share in net asset value because of losses on debt issued by Lehman Brothers Holdings Inc.
Investor redemptions will be delayed as long as seven days, the fund's owner, Reserve Management Corp., said today in a statement. Withdrawals requested before 3 p.m. New York time today will be paid at $1 a share.Bruce Bent chairman of New York-based Reserve Management, opened the first money-market mutual fund in 1970. The only other money-market fund to inflict losses on investors was the Community Bankers Mutual Fund in Denver, which liquidated in 1994 because of losses on interest-rate derivatives.
``This is uncharted territory,'' said Peter Crane, president of Crane Data LLC in Westborough, Massachusetts, which tracks money-market funds. ``That's certainly a stunner.''The fund held $785 million in Lehman Brothers commercial paper and medium-term notes. The fund's board revalued the Lehman holdings at $0 effective 4:00 p.m. Lehman filed for bankruptcy protection yesterday.Bent often said the best money-market funds should be ``boring.'' He derided other funds that invested in securities linked to subprime mortgages and other risky debt.