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Royal Bank Covers Canadians Hurt By Reserve Fund
September 26, 2008
The Royal Bank of Canada has pledged $35 million to help cover clients invested in a money market mutual fund that recently broke the buck, Reuters reports.
The Reserve Management Co.’s Primary Fund broke the buck Sept. 16 after its net asset value fell below $1.00 a share to 97 cents, due to losses of $785 million in Lehman Brothers Holdings Inc., which filed for bankruptcy.
Assets of the Primary Fund are currently frozen. RBC’s U.S. wealth management unit has started a redemption request. RBC said they will mitigate client losses by up to 3 cents a share if they get less than $1.00 when the fund is liquidated.
RBC said the money market funds it manages have not been affected.
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