Crane Data Subscribers
SIV Damage Estimates Shrinking in Latest Quarterly Earnings Reports. More details are emerging on the actions that advisors have taken to remove or support troubled SIV holdings from their money market or "enhanced cash" funds in the latest round of quarterly earnings reports. US Bancorp disclosed on its earnings call that a "pre-tax asset valuation loss" of $107 million applied to the purchase of $3.0 billion in securities from its FAF (First American Funds) unit. Their still-very conservative loss estimate of 3.6% is much lower than a couple prior outliers, including STI's 16%. It also appears in-line with early-crisis loss estimate such as Evergreen and Credit Suisse's. (Crane Data's January issue of Money Fund Intelligence included a listing of all the bailouts to date with amounts purchased and losses taken. We believe eventual troubled SIV losses will be less than 1% for money funds.) Also, enhanced cash pressures and losses appear to be easing. In the midst of BlackRock's stellar earnings, was a smaller-than-expected $24 million charge for support of its Cash Strategies "enhanced cash". Today's WSJ says, This included "$18 million in funding put up by BlackRock in support of the funds' net asset values, and a $12 million charge for capital support agreements". In other news, S&P just suspended the AAAf/S1 rating on Washington's King County Local Government Investment Pool, due to a lack of information on its Mainsail II SIV-lite holding (which is in the midst of liquidation).
