Fearful of how a change in ratings will help them market their funds among investors, money fund managers are chafing at the idea of
“These proposals are going down [among fund companies] like a lead zeppelin,” said Peter Crane, founder of
Dan Serrao, senior vice president at Moody’s global managed investments group, said: “There are risks that are unique to money market funds, and we’re looking to provide additional information for investors.”
The credit crisis subjected money market funds to “significant stresses that the sector had not previously experienced,” Moody’s said, pointing to Lehman Brothers’ insolvency, the collapse of the Reserve Primary Fund and the inability of 30 other funds to meet redemptions in September 2008. Thus, the new scale looks at such key factors as asset profile, weighted average maturity and obligor concentration. The ratings scale also takes into account a fund’s sensitivity to interest rate shifts.