Legg Mason gets Citibank infusion
Legg Mason has obtained a letter of credit from Citibank to support a $150 million SIV holding in one of its funds.
Legg Mason Inc. has obtained a letter of credit from Citibank to support a $150 million structured investment vehicle holding in a money market fund managed by London-based subsidiary Cheyne Finance LLC.
Under the agreement, with that ends no later than March 3, 2009, Legg Mason must reimburse the bank any amounts drawn on the letter of credit, according to a filing with the Securities and Exchange Commission.
“This latest action is consistent with our efforts to support our money market funds in light of the current stresses in the markets,” said Mark R. Fetting, the Baltimore-based company’s president and chief executive officer in a statement.
“We continue to make progress in reducing the exposure of our money market funds to SIV holdings.”
As a result of turbulent market conditions, Legg Mason has accrued a non-cash charge to earnings of roughly $142 million in the first quarter to date, company officials said.
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