Federated Investors recently posted a comment on money funds investing in refinanced auction-​rate preferred securities. The brief asks, "Are Federated Money Market Funds investing in the new securities resulting from the refinancing of some Adjustable Rate Preferred securities (​ARPS)? It responds, "​In early May, a few investment mangers announced that they had secured an alternative form of borrowing that enabled them to redeem outstanding ARPs at their par value and refinance the debt. Federated will consider these notes for investment in our prime money market funds only after employing the same thorough due diligence process that we use for all investments; this process includes a review of capital structure, liquidity structure, management structure and other key factors before investing in any issuer."

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