Original Money Market Fund Breaks the Buck

The Reserve family of funds, which originated the money market fund concept with what is now called The Primary Fund and has some $120 billion under management, announced September 16 that The Primary Fund has broken the buck, putting the NAV at $0.97 as of 3:00 PM on September 16. The Reserve said it was taking the step after revaluing the $785 million face value of Lehman Brothers debt held by the fund at zero. Moreover, The Reserve said it is instituting a seven-day redemption delay from The Primary Fund. Beginning Sep. 17, The Reserve said it will calculate the NAV of The Primary Fund, which reportedly had about $23 billion in assets on Sep. 16, once a day at 5:00 PM Eastern time.