Crane Data Subscribers
Are Money Market Mutual Fund Sponsors Under The Most Stress Ever? Bloomberg writes, "Money Fund Sponsors May Be Under Most Stress Ever, Moody's Says", quoting Moody's Investor Service's Henry Shilling, "You're seeing more stress perhaps than we've ever seen before both in terms of the number of issues that are involved and the aggregate market value of the troubled securities." The article says, "The 10 largest managers of U.S. money-market funds owned a total of about $50 billion in short-term debt of SIVs, some of which has defaulted." Seven advisors to date -- Columbia, Credit Suisse, Evergreen, First American, SEI, STI, Western Asset -- have acted to date to shore up funds or to prevent "losing their top credit ratings". Moody's cites 145 cases prior to 2007 when sponsors acted to protect funds, the bulk of which occurred in 1994. Our Peter Crane disagrees with Moody's most dire assessment, saying in the Bloomberg piece, "The difference in 1994 is that everyone was under duress [due to rising rates].... The funds affected now are just a slice of the money-fund universe." Crane says assets breaking $3 trillion has also helped "fund managers mitigate exposure to the distressed debt".
