Moody's Rates BlackRock LEAF Aaa-mf
A press release entitled, "Moody's assigns a Aaa-mf rating to the BlackRock LEAF Fund," tells us, "Moody's Investors Service … assigned a Aaa-mf rating to the BlackRock Liquid Environmentally Aware Fund (LEAF). The money market fund seeks to earn as a high level of current income in US Dollar terms while providing liquidity and the preservation of capital. At least 80% of the fund's net assets, plus any borrowings for investment purposes, will be invested in securities that meet the fund's environmental criteria. The fund also has a number of environmental provisions that limit investments in companies that derive a significant portion of their revenue from non-renewable energy sources. BlackRock Advisors, LLC serves as investment adviser of the fund. Being an environmental fund, this is the first money market fund of such classification to be rated by Moody's." Moody's adds, "The Aaa-mf rating reflects the Fund's high scores across key rating factors including asset quality, fund liquidity and resilience to market risks. The Fund's credit quality is strong as it will primarily invest in treasury debt and commercial paper. Given the investment objective of the fund, we expect the credit quality to remain strong. The Fund's ability to provide liquidity is also very strong and is demonstrated by the high level of expected overnight liquidity/AUM. The Fund limits its interest rate and spread risks by keeping its weighted average maturity (WAM) below 60 days." The rating and the latest Form N-1A Registration for BlackRock LEAF hint that the fund's launch is imminent. BlackRock will charge total expenses after waivers of 0.24% on the Inst class (LEFXX, $2 million minimum) and 0.49% on the Investor A (LEAXX, $1,000 minimum) shares, according to the filing, which indicates that the fund will be a "non-retail" and "non-government" fund (i.e., Prime Institutional). In addition to having a decent claim on being the first purely "environmental" money fund (DWS launched the first ESG money fund late last year), it also appears to be the first to offer a "retail" share class on an Institutional fund. For more, see the following recent Crane Data News articles: "More on Green, ESG Money Funds: What's Not There, Barron's; N-MFP" (2/11/19), "SSGA's 2019 Global Cash Outlook Discusses ESG MMF Challenges, Tech, AI" (2/4/19), "FT Says China's Ant Shrinks; More on BlackRock LEAF; Weekly Holdings" (1/30/19), "BlackRock to Launch Environmental MF; Wells on Prime; SnP on EU Regs" (1/23/19), and "DWS ESG Liquidity Goes Live; Federated Explains Prime Private Fund" (9/17/18).
