Merrill Lynch has reached a global resolution with the New York Attorney General and state securities regulators to resolve issues related to sales of auction-rate securities. The firm also reached an agreement in principle with the staff of the Securities and Exchange Commission.
Under this agreement, Merrill Lynch will accelerate the plans it to purchase auction rate securities from its retail clients. Merrill Lynch individual clients, not-for-profit organization clients (including all charitable, educational and religious organizations) and small business clients who had on February 13, 2008 less than $4 million in assets at Merrill Lynch will have a 15-month period beginning on October 1, 2008 and ending on January 15, 2010 in which to sell their ARS to Merrill Lynch at par. In addition, we have agreed to move the start date to purchase ARS from other eligible clients from January 15, 2009 to January 2, 2009. Merrill Lynch’s offer to purchase ARS will remain open through January 15, 2010.
It is estimated that Merrill Lynch retail clients eligible for the October purchase currently hold an estimated $4 billion in ARS, which Merrill Lynch expects to be reduced to under $3.25 billion by October as a result of announced and anticipated issuer redemptions.
Between continuing redemptions, clearing auctions and the firm's offer, the firm estimates that approximately 90 percent of our retail clients who held ARS at Merrill Lynch in February will either have been redeemed, refinanced or will have the choice to sell their ARS to the firm by October.
Showing posts with label ARS. Show all posts
Showing posts with label ARS. Show all posts
Saturday, 23 August 2008
Saturday, 16 August 2008
Wachovia Announces ARS Settlement
Wachovia Corporation announced today that it has reached an agreement in principle for a global settlement with the Missouri Secretary of State (as the lead State in the North American Securities Administrators Association task force investigating the marketing and sale of auction rate securities, or ARS), the Attorney General for the State of New York and the Securities and Exchange Commission regarding ARS. Wachovia is pleased that the settlement produces a liquidity solution for its clients who purchased ARS at Wachovia.
"We understand that unprecedented market conditions have created difficulties for our clients, particularly those holding auction rate securities," said Robert K. Steel, president and chief executive officer of Wachovia Corporation. "We are pleased to announce a comprehensive solution for the liquidity needs of clients who purchased auction rate securities at Wachovia and to resolve this matter with federal and state regulators."
Daniel J. Ludeman, president and chief executive officer of Wachovia Securities, LLC, said, "Since this issue arose in February when auctions first started to fail, we have played a leading role in encouraging ARS issuers to restore liquidity to all of our clients, including those who have become part of our firm through the Oct. 1, 2007, merger of A.G. Edwards and Wachovia Securities. The dollar value of ARS held by Wachovia Securities clients has been cut by more than 50 percent through redemptions and successful auctions. Today's agreement in principle underscores our desire to ensure that clients who purchased ARS at Wachovia receive the liquidity they need."
"We understand that unprecedented market conditions have created difficulties for our clients, particularly those holding auction rate securities," said Robert K. Steel, president and chief executive officer of Wachovia Corporation. "We are pleased to announce a comprehensive solution for the liquidity needs of clients who purchased auction rate securities at Wachovia and to resolve this matter with federal and state regulators."
Daniel J. Ludeman, president and chief executive officer of Wachovia Securities, LLC, said, "Since this issue arose in February when auctions first started to fail, we have played a leading role in encouraging ARS issuers to restore liquidity to all of our clients, including those who have become part of our firm through the Oct. 1, 2007, merger of A.G. Edwards and Wachovia Securities. The dollar value of ARS held by Wachovia Securities clients has been cut by more than 50 percent through redemptions and successful auctions. Today's agreement in principle underscores our desire to ensure that clients who purchased ARS at Wachovia receive the liquidity they need."
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