Legg Mason tapped another $630 million to prop up the value of three money-market funds it manages due to losses on asset-backed commercial paper holdings, confirmed spokeswoman Mary Athridge.
None of the funds — the Citi Liquid Institutional Liquidity Reserve Fund, the Western Institutional Money Market Fund and the CILF U.S. Dollar Liquidity Fund — has dipped below the $1 mark in value, and no shareholder losses were incurred, Ms. Athridge added. She also said the funds do not hold any securities from Lehman Brothers Holdings Inc., American International Group Inc. or Washington Mutual.
Legg Mason has already invested $1.1 billion in the same three funds since the fall of 2007, when the credit crisis first erupted and the auction-rate security market seized up.
The firm expects to take a non-cash charge of $318 million in the quarter to prop up the money-market funds, according to a news release. Net of adjustments to operating expenses and taxes, the charge will be $187 million, or $1.33 a share.
Ms. Athridge also said Legg Mason was joining the newly announced Treasury Department plan to guarantee the value of U.S. money-market funds. “We don’t anticipate needing to use the facility, but our clients will find it reassuring to have it in place,” she said.
Legg Mason had $923 billion in assets under management as of June 30.
