Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Legg Mason Declares its Money Market Funds 'SIV-Free' Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, March 05, 2009

Legg Mason Declares its Money Market Funds 'SIV-Free'

News summary by MFWire's editors

Legg Mason has rid its money market funds of securities issued by structured investment vehicles. The Baltimore firm sold a total of $1.8 billion of par value SIV securities from five different issuers. Of the amount, $1.4 billion represented SIVs held by four of Legg's money market funds.

"With the sales announced today, our money market funds are now completely SIV-free," said Legg Mason chairman and CEO Mark Fetting in a news release Thursday morning.

The remainder of the $1.8 billion represent $57 million of SIVs held by the company and $355 million of SIVs that had been supported through a total return swap with a major bank.

Legg Mason will retain $49 million in SIVs from two issuers that it has been carrying on its balance sheet.
Company Press Release

BALTIMORE, March 5 /PRNewswire-FirstCall/ -- Legg Mason, Inc. (NYSE: LM) today eliminated all of the remaining securities issued by Structured Investment Vehicles and other similar conduits (SIVs) from its money market funds.

The Company and the funds separately sold a total of $1.8 billion of par value SIV securities from five different issuers. Of this amount, $1.4 billion represented SIVs held by four of the Company's money market funds, $57 million of SIVs held by the Company, and $355 million of SIVs that had been supported through a total return swap with a major bank. As a result of these transactions, there was a net cash outflow to the Company of $1.2 billion. The Company will retain $49 million in SIVs (current carrying value) from two issuers that it has been carrying on its balance sheet.

Legg Mason Chairman and CEO Mark R. Fetting commented: "With the sales announced today, our money market funds are now completely SIV-free. We are pleased that our business teams were able to resolve this issue and protect our money market franchise while our investment teams have focused on its goal of providing principal stability, credit quality, and current income. We have done what we said we would do."

Mr. Fetting continued, "In persistently difficult markets, we took this final proactive step not only to resolve the SIV issue, but also to keep our balance sheet strong. With the expected tax refund, we will have $1 billion in available cash and we have taken a definitive step towards protecting Legg Mason's profitability."The Company expects to realize approximately $500 million in a tax refund in the summer of 2009, which it may use to repay debt or for other corporate purposes. After the transactions, and giving effect to the tax benefit but not any possible debt repayment, the Company's total cash position will be $1.6 billion, including $600 million of working capital.

Impact on Quarterly Results

Reflecting the impact of today's transactions and mark-to-market adjustments on retained SIVs, the Company expects to incur gross charges of $610 million in its quarter operating results ($367 million net of adjustments to operating expenses and taxes, or $2.59 per diluted share).
 

Edited by: Armie Margaret Lee


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2019
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use