AAA Funds OK to do Bear Stearns Repo
S&P says "Rated Funds May Maintain Overnight Repurchase Agreements With The Bear Stearns Cos.". We reported this earlier, but an official release has now been posted. It says, "Standard & Poor's Ratings Services today affirmed its view that overnight repo investments with The Bear Stearns Cos. Inc. (BBB/Watch Dev/A-3) are consistent with our rated fund criteria that look to the creditworthiness of the repo counterparty. The criteria for highly rated funds calls for repo providers to maintain short-term ratings of 'A-1+' or 'A-1' or equivalent credit quality. This is based on JPMorgan Chase & Co.'s (AA-/A-1+/Stable) plans to acquire Bear Stearns, and its guaranty agreement, which unconditionally guaranties the due and punctual payment of all covered liabilities of the covered Bear entities (as defined in the guaranty agreement)."
