One year ago today, the money market mutual fund industry and the world economy were irrevocably changed as the bankruptcy of Lehman Brothers and the ensuing "breaking of the buck" by Reserve Primary Fund triggered a near panic in the money markets and an unprecedented level of government intervention and support. Money funds and investors have recovered somewhat from the chaos and fear of a year ago, though scars and concerns will undoubtedly linger for years. Below, we excerpt a number of quotes from Crane Data's September 2008 News Archives, which includes the week which will live in infamy, September 15 through Sept. 19.

Last Sept. 15 as the unexpected Lehman bankruptcy news hit, we expected to see yet another cluster of routine support actions from money fund advisors. Crane Data wrote early Monday, in "Fed Moves, Limited Exposure Should Shield Money Mkts From," "The bankruptcy filing of Lehman Brothers has led to a downgrade of the company's short-term debt by Moody's from P-1 to Not Prime. The impact to money market fund is likely to be contained, however, since Lehman had been a minor issuer in the commercial paper (CP) and medium-term note (MTN) marketplace, with about $3 billion in CP outstanding. There also likely will be repercussions from the company's repurchase agreement and other short-term financings and supports. These issues, though, should be alleviated by the other news of the weekend -- the Fed's move to expand its liquidity facilities, and the takeover of Merrill Lynch by Bank of America."

Later that day (Monday), we wrote, "Evergreen Issues Statement Supporting Lehman Holdings in Funds," "A number of money market mutual funds are in the process of issuing statements either saying that they have no exposure to Lehman Brothers, which was downgraded to 'Not Prime' from P-1 ('First Tier') earlier today, or saying that they are taking steps to support their funds (or that their holdings are not large enough to impact the $1.00 NAV). Evergreen Investments was the first to issue a statement today saying that they've taken action to support their money funds. Though Lehman CP and MTN holdings are not widespread in money funds, other announcements are expected to follow."

The year-ago article continued, "Evergreen's web posting says, 'Wachovia Corporation has entered into support agreements with Evergreen Money Market Fund, Evergreen Institutional Money Market Fund, and Evergreen Prime Cash Management Fund in which Wachovia will support the value of Lehman credit held in the Funds." Crane Data's News added, "Companies issuing statements to shareholders saying that they have NO exposure to Lehman Brothers (some also cite no exposure to AIG and Washington Mutual) include: AIM, American Beacon, BlackRock, DB Advisors, Federated Investors, Morgan Stanley, UBS and Western Asset Management."

On Tuesday, September 16, Crane wrote, "Lehman Support Actions Push Money Fund Bailouts to 20 Total, which said, "We wrote yesterday about money funds' limited exposure to Lehman Brothers and about the support actions taken by investment advisors so far. Evergreen and Russell have disclosed support agreement for their funds, while some other funds have disclosed Lehman holdings and pledged to maintain their $1.00 NAVs. The vast majority of money funds appear to have no direct exposure to Lehman, though they're now answering questions on AIG, which was downgraded to A-2 but is still P-1 (short-term ratings), and WaMu."

It continued, "The latest crisis should bring Crane Data's tally of the number of advisors supporting their money funds over the past 13 months to 20. Besides Evergreen, money funds disclosing or showing holdings of Lehman in recent public filings include: Columbia Cash Reserves, which held $400 million, or 0.73% of its assets; Reserve Primary; and Russell Money Market Fund. All are expected to protect their funds from any threat to the $1.00 a share NAV should it become necessary.... [A] Dow Jones story also says, [S]everal money funds reported holdings in Lehman paper in their most recent filings.... One example is the Primary Fund managed by New York money manager The Reserve. As of May 31, the $64.85 billion Primary Fund had some $785 million in Lehman commercial paper and medium-term notes.' It added, 'The Reserve has historically protected the NAV of its money funds as needed.'"

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