The Reserve begins $4.5B distribution of fund

The Reserve Management Co. Inc. said yesterday that it has begun the initial $4.5 billion distribution to shareholders of its U.S. Government Fund. The distribution represents about 40% of the total assets of the fund at the close of business Sept. 15. “We will make additional distributions as more cash becomes available either through sales at amortized cost [no loss being realized] or maturity,” Bruce Bent, president of The Reserve, said in a statement. The fund’s assets totaled about $10.5 billion as of Sept. 15, and the fund has maintained a net asset value of $1 a share, the New York-based firm reported. Redemptions from the fund have been suspended since Sept. 22. On Oct. 2, the firm announced plans to liquidate the fund. The fund is one of many set for liquidation following the decision by The Reserve to liquidate its Primary Fund. That fund’s net asset value fell to 97 cents and “broke the buck” Sept. 15.