S&P put out two press releases on local government investment pools yesterday -- "S&P: Florida Surplus Asset Fund Trust 'AAAm' Rating Remains On CreditWatch Negative and "S&P: Colorado Surplus Asset Fund Trust (CSAFE) 'AAAm' Rating Remains On CreditWatch Negative" which deal with pools holding impaired investments in Reserve Primary Fund. The first release says, "Standard & Poor's Ratings Services said today that its 'AAAm' principal stability fund rating on the Florida Surplus Asset Fund Trust (FLSAFE) remains on CreditWatch with negative implications, where it was placed Feb. 27, 2009. The initial CreditWatch action was based on uncertainty surrounding the redemption share price or net asset value (NAV) the pool expects to receive from its investments in the Reserve Primary Fund. On Feb. 26, the Reserve stated that it would set aside $3.5 billion in a special reserve to cover potential damages and legal fees. On May 5, 2009, the SEC filed fraud charges against several entities and individuals who operate the Reserve Primary Fund for failing to provide key material facts to investors and trustees about the fund's vulnerability as Lehman Brothers Holdings Inc. sought bankruptcy protection. We believe that in bringing the enforcement action, the SEC also seeks to expedite the distribution of the fund's remaining assets to investors. Although this SEC action is an important development in resolving the distribution of fund shares, it does not, in our view, eliminate the uncertainty that prompted the CreditWatch actions on FLSAFE. We will continue to monitor the situation and revise our opinion if necessary. The placement on CreditWatch negative signifies that we could affirm or lower the rating pending the final NAV payout to Reserve Primary Fund holders and the pools' ability to maintain a stable NAV."

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