Besides supporting four money market funds with exposure to structured investment vehicles with $420 million in capital of its own, Legg Mason has signed a one-year renewal with a bank to support $355 million in SIV securities. As of Nov. 30, the par value of SIV exposure in the funds was $2.8 billion, down from $10 billion as of Oct. 31, 2007.
In conjunction with this, Legg Mason is on track to shave $120 million from its annual operating budget beginning March 31.
Legg Mason continues to manage its resources and to take proactive steps in support of our money market funds during difficult market conditions, said Legg Mason CEO Mark R. Fetting.
Todays actions give us financial and operating flexibility to handle potential further market deterioration. We are pursuing a number of options to eliminate exposure to SIVs in the money market funds. We have the ability and the resolve to work through these challenging markets as we act in support of our clients, our funds and our shareholders, Fetting added.