Bank of America Money Market Fund Frozen

Posted by John Carney, Dec 10, 2007, 11:28am

CNBC online editor Charlie Gasparino is reporting that his sources tell him that that Bank of American has frozen a money market fund tailored towards institutional investors.

The fund is called the Colombia Strategic Cash Portfolio. Apparently Bank of America has sent a letter to investors notifying them that the fund will no longer take subscriptions or redemptions. The fund is invested in debt securities that are caught up in the crunch. He says Bank of America has not yet confirmed the story.

Update: And now they have. Gasparino says Bank of America confirms the story of the fund freeze. Anyone know who has money caught up in this fund?

Update: Both CNBC and our commenters report that it's not a straight money-market fund but a fund intended to achieve money-market type results. It's heavily invested in SIV paper, we're told. Where's that MLEC thing when you need it?

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Posted in: Bank of America

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Posted by inIT4the$, Dec 10, 2007 12:07PM

It's not market fund

By Chris Dolmetsch
Dec. 10 (Bloomberg) -- Bank of America Corp. has frozen its
Columbia Strategic Cash Portfolio fund, which is marketed to
institutional investors and has about $12 billion in assets,
financial news network CNBC reported, citing unidentified people
in money management.
Bank of America sent a letter saying that the company will
no longer take subscriptions or redemptions as a ``direct
result'' of the subprime-mortgage credit crisis, CNBC reported,
citing the people.
The fund, which isn't marketed to smaller retail investors,
apparently had invested in some debt securities that are being
affected by the crisis, CNBC said.

--Editors: Ted Bunker, Charlotte Porter.

Posted by inIT4the$, Dec 10, 2007 12:08PM

sorry, money market

Posted by anonymous, Dec 10, 2007 12:14PM

just spoke with my B of A treasury sales person. the frozen fund is NOT one of their MM funds but is instead a 144A product intended to be "money-market-like". no consolation to those that are in the frozen fund, of course.

Posted by anon anon anon, Dec 10, 2007 12:47PM

CEO Ken Lewis needs the HYMLEK manover board farewell.

Posted by , Dec 10, 2007 6:45PM

Ok, I'm not that savvy when it comes to investing (sell side guy). But can anyone tell me why exactly one would invest in anything but a straight money market fund if one intends to achieve "money-market type results"? I mean, why give yourself the potential headache of investing in anything more exotic to get your 5%?

Posted by , Dec 10, 2007 8:31PM

at the time money markets were yielding about 1%

Posted by , Dec 12, 2007 12:36PM

The yield wasn't 5% with fed funds at 1% on a cash fund. If it was show me. It was marketed as a money market fund. The $25MM minimum doesn't make a difference, they just tier the yield. There are plenty of enhanced cash or what ever cash funds out there to bite individual investors too.

If you are getting 25 bps over the 3 month, you own A. lower credit quality bonds B. leveraged bonds C. both

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