China Expects To Recoup Reserve Primary Money
China's sovereign-wealth fund said it expects to recoup $5 billion it invested in a U.S. money-market fund because it requested the money be withdrawn shortly before the fund froze redemptions.
China Investment Corp. said Wednesday it was no longer an investor in the Reserve Primary Fund when the fund suspended redemptions Sept. 16. CIC hasn't yet received the money back but expects to receive the full amount, it said in a statement on its Web site.
The fund 'has confirmed in writing that it will return CIC's full capital and interest,' the Chinese investment firm said. It said it was now a creditor rather than shareholder in the fund.
Reserve Primary didn't immediately return calls for comment.
CIC said it has been in contact with the U.S. Securities and Exchange Commission, 'highlighting the Fund's promise of full repayment to CIC and CIC's legal rights.'
CIC was listed in regulatory filings as holding 11.1% of the Reserve Primary Fund's institutional-class shares through a subsidiary as of Sept. 1, roughly two weeks before it froze redemptions.
The Reserve Primary Fund, the flagship of Reserve Management Corp., last month became the first money-market fund in 14 years to 'break the buck,' meaning its net asset value fell below $1 per share. It held $785 million of Lehman Brothers commercial paper and medium-term notes when the investment bank filed for bankruptcy protection Sept. 15. The next day, after investors rushed to pull their money out of the fund, it said its net asset value had fallen to 97 cents per share and suspended redemptions. |
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