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Legg Mason Protects Investors of Offshore Western, Citi Money Funds. Legg Mason says, "It has taken action to reduce the holdings of securities issued by certain asset-backed commercial paper ("ABCP") issuers held by two non-US stable net asset value liquidity funds" run by its Western Asset subsidiary (which also runs the Citi funds). Legg Mason entered into a "swap" costing $83 million to remove $890 million worth of SIVs from its Dublin-based Citi Institutional Liquidity Fund and Legg purchased outright an additional $132 million in SIV securities. Legg also "agreed to acquire" $99 million in Canadian ABCP from Citi Institutional Cash Reserves. A release says, "While current market conditions remain challenging, and no guarantees can be given, Legg Mason is confident that its liquidity funds will continue to maintain a stable net asset value and their portfolios are appropriately positioned to continue to satisfy the liquidity needs of investors." Legg Mason says "SIV exposure in liquidity funds has declined to 3.2% of total assets". It filed an 8-K with more details, but expects to take an expense of $89.7 million "as a result of all the liquidity fund support it has provided to date". Legg has previously taken action to protect its domestic U.S. money funds. The company added, "Neither fund, nor their shareholders, incurred any loss in connection with the transactions".
