Moody’s has downgraded Legg Mason’s senior debt from A2 to A3, on concerns over poor mutual fund performance and the $2 billion that Legg Mason has pledged to backstop money market funds, the Baltimore Business Journal reports.

With many of its funds invested in structured investment vehicles, Legg has suffered $650 million in after-tax losses in the past 12 months.

Legg has set aside $2.3 billion in cash to meet redemptions and any further troubles its funds might face. The firm’s Chief Financial Officer C.J. Daley said Legg is “well positioned to manage ongoing volatility in the financial markets, as is reflected in our solid investment grade rating.”

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