Fitch Ratings published "Primer: Window Variable-Rate Demand Bonds". It says, "Investments in variable-rate demand notes (VRDNs) have historically dominated portfolios of tax-exempt money market funds (MMFs).... [D]emand for these securities from prime MMFs has also increased mainly due to a lack of supply in the taxable short-term market. A new product referred to as window variable rate demand bonds (window VRDBs) purchased by tax-exempt MMFs offers a high-quality investment option and is designed to broaden portfolio diversification.... Despite the increased liquidity risk, all recent window VRDB issuances have been oversubscribed. The high level of investor interest reflects the relatively small number of window VRDBs issued to date and the scarcity of other higher quality investment options without exposure to the financial sector." In other news, see `The Boston Globe's "Fidelity Investments loses a state cash account", which says, "The state treasurer's office said it has awarded its $9.5 billion cash contract to Federated Investors Inc, moving the business away from Boston's Fidelity Investments, which has had the business for 35 years. Treasurer Steven Grossman said the state would save $8.2 million over three years, or 34 percent of the current cost, by moving the Massachusetts Municipal Depository Trust contract to Pittsburgh-based Federated. The trust is also known as MMDT."

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