Demand is surging for 'AAA' ratings on offshore money market mutual funds, particularly new U.S. dollar Treasury funds, and local government investment pools. Standard & Poor's today announced a flood of new 'AAAm' (money fund or "principal stability fund" rating), 'AAAf/S1+' (accumulating money fund), and 'AAAf/S1' (enhanced cash-like) ratings. Analyst Joel Friedman tells us, "Cash is king in the market." On the flurry of recent LGIP and offshore ratings, "That's where the demand is coming from."

S&P rated Prime Rate Sterling, Euro and Dollar Liquidity Funds AAAm, the ratings agency's highest principal stability fund rating. The funds are subfunds of Prime Rate Cash Management Funds, domiciled in England and Wales. Prime Rate Capital Management LLP was "established in April 2007 by Chris Oulton and the other founding partners as a joint venture with Matrix Group," says the company's website.

In the first of a number new Treasury launches offshore, S&P rated Goldman Sachs Treasury Liquid Reserves AAAm. Like most offshore "U.S.-style" money funds, the GS fund is domiciled in Ireland (Dublin) and is "a subfund of the Goldman Sachs Funds plc umbrella structure". The fund "will primarily invest in U.S. Treasury bills, notes, bonds, and repurchase agreements (repos)". Federated and BNY Mellon Universal are among the few with existing offshore USD Treasury and Government offerings currently.

Western Asset U.S. Treasury Reserves Ltd. was also rated 'AAAm' by S&P. The fund is "an open-end, diversified mutual fund incorporated as an exempted company in the Cayman Island" and its "investment objective is to provide its shareholders with liquidity and as high a level of current income from U.S. Government obligations as is consistent with the preservation of capital," says the release. Several more Dublin and Cayman Islands domiciled Treasury money market fund launches are pending.

Ratings were also announced for Invesco Euro Reserve Fund (AAAf/S1+) and Hillsborough County Investment Pool (AAAf/S1). S&P, which now rates 83 LGIPs, says, "The Clerk of the Circuit Court/Comptroller for Hillsborough County, Fla. is responsible for overall management of the approximately $2.1 billion. The Clerk/Comptroller manages the [$1.5 billion] short-term portion.... Public Financial Management has subadvised the longer term portion of the Pool's assets -- approximately $600 million -- since 2002."

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