MINNEAPOLIS--(BUSINESS WIRE)--
Ameriprise Financial, Inc. (NYSE:AMP) today announced that it will
commit up to $33 million to protect clients who have invested in The
Primary Fund, a money market mutual fund managed by Reserve Management
Co.
The Reserve reported a net asset value (NAV) for The Primary Fund
of $0.97 per share on September 16, 2008. Ameriprise Financial will
provide up to $33 million of its own capital to mitigate client losses
up to 3 cents per share should clients receive less than $1.00 per
share when the fund is liquidated. Ameriprise Financial is taking this
extraordinary action in recognition of the unprecedented nature of
this event and the prospect that this situation will not be covered by
the proposed U.S. Treasury money market guarantee program.
The Primary Fund became the first major money market mutual fund
ever to "break the buck," or record a NAV below $1.00 per share, on
Tuesday, September 16, 2008. Since then, assets held by individual
investors across the nation--including many clients of Ameriprise
Financial--have been inaccessible.
Ameriprise Financial has taken a number of steps to provide
comfort for its clients. We are continuing an active dialogue with
regulators and legislators, as well as actions in federal court, to
secure an equitable and expeditious liquidation of the fund. In the
meantime, Ameriprise Financial is also leveraging its strong financial
position to provide clients with the liquidity they need to fund their
routine expenses.
"The unprecedented situation with The Reserve has caused
significant anxiety and hardship for individual investors," said
Chairman and CEO Jim Cracchiolo. "Ameriprise Financial has taken a
number of extraordinary actions on our clients' behalf. With this
additional action, we are addressing losses incurred through an
investment option that has for decades provided an unquestioned safe
haven for consumers' cash.
"The next step in this process requires the urgent attention of
regulators and legislators: They need to expedite the liquidation of
the Reserve funds in a fair and equitable manner for all shareholders
so that millions of American investors can get their money back."
Ameriprise Financial expects this commitment to have an impact of
approximately 1 cent per share on its third quarter earnings.
About Ameriprise Financial
Ameriprise Financial, Inc. is a diversified financial services
company serving the comprehensive financial planning needs of the mass
affluent and affluent.
For more information, visit ameriprise.com.
Source: Ameriprise Financial, Inc.
Contact: Ameriprise Financial
Ben Pratt, 612-678-5881 (Media Relations)
benjamin.j.pratt@ampf.com