Money market mutual funds had until the end of business yesterday to renew their participation in the US. Treasury's Money Market Fund Guarantee Program. It appears that virtually all money market mutual funds have done so, applying to renew their Treasury $1.00 NAV insurance. Nine out of the top 10 and thirteen of the 15 largest managers of money funds -- Fidelity, JPMorgan, Federated, BlackRock, Dreyfus, Schwab, Vanguard, Columbia, Wells Fargo, Western (Legg Mason/Citi), First American, Northern, and AIM (Invesco) -- all have posted notices declaring their participation. We expect the rest to follow.
The program extension announcement (see the Nov. 25 Crane Data article, "Treasury Extends Temporary Guarantee Program for Money Mkt Funds") said, "The U.S. Treasury Department today announced an extension of Treasury's Temporary Guarantee Program for Money Market Funds until April 30, 2009 to support ongoing stability in this market. All money market funds that currently participate in the program and meet the extension requirements are eligible to continue to participate.... The temporary guarantee program will continue to provide coverage to shareholders up to amounts that they held in participating money market funds as of the close of business on September 19."
Some fund groups, like First American, JPMorgan, and Northern, have excluded Treasury funds from coverage, while some, like Columbia, have also excluded Government money funds. The cost of the program is the same as before, approximately 1 basis point a quarter. The premium cost is 1.5 basis points for the 4 1/2-month (Dec. 19 through April 30) period (2.2 basis points for funds with NAVs of $0.995 to $0.9975), and payments for the extension were "based on a fund's net asset value as of September 19." Other fund groups announcing their participation via website announcements or via SEC filings include: Barclays Global, Cavanal Hill, Evergreen, MainStay, PIMCO, Prudential, SIT, SunAmerica, UBS, UCM (Utendahl), and Virtus.
The Treasury's extension announcement added, "The program currently covers over $3 trillion of assets. The Secretary may extend the program until September 18, 2009; however, no decision has been made to extend the program beyond April 30, 2009. If a fund does not participate in this extension, that fund will not be eligible to participate in any potential further extension of the program." See the new December issue of Money Fund Intelligence for more details on the Treasury Guarantee and other Government support programs.
