Crane Data Subscribers
State Board Halts Redemptions in Florida Local Govt Investment Pool. Following concerns about a handful of downgraded and defaulted SIV holdings and fed by a Bloomberg article, "Florida School Fund Rocked by $8 Billion Pullout", the Florida State Board of Administration today voted to halt redemptions in its Local Government Investment Pool. The pool had been drafting a bailout plan, but Florida Governor Charlie Crist and CFO Alex Sink decided to freeze withdrawals while crafting a possible bailout plan. Exeptions may be made for payrolls. (For info from the pool, click here.) On an emergency call today, Executive Director Coleman Stipanovich said that $10 billion has fled the now $15 billion pool. The state board on Dec. 4 may seek "credit protections for the pool against the potential for default by approximately $1.5 billion in securities from four issuers: Axon Financial, KKR Atlantic, KKR Pacific, Ottimo Funding and Countrywide". The pool had said it will seek a AAAm (money market) rating and adopt more money fund-like investment policies in the future. But it likely faces eventual liquidation following today's decision. While some government investment pools invest like money market funds, the majority stray beyond money funds' strict Rule 2a-7 quality, maturity, and diversity guidelines. (See also Bloomberg, MarketWatch and Orlando Sentinel stories.)
