Legg Mason reduces SIV exposure

by Richard Kilner

Story link: Legg Mason reduces SIV exposure

Legg Mason has reduced its exposure to SIVs (Structured Investment Vehicles) by $1.7bn (43%) with the sale of its holdings in Axon Financial.

Of the $1.7bn, $1.36bn was held in the Company’s funds, and following the transaction there was a net cash outflow to the Company of $1bn.

Neither the funds nor the shareholders were struck by a loss in the transaction.

Mark R. Fetting, Legg mason’s CEO and chairman, described the move as a significant step to utterly eliminating the firm’s SIV exposure.

Following the transaction the Company will have $2bn in cash which can be utilised to cover the remaining SIV exposure of $1.4bn that Legg Mason supports in the money markets or via TRS.

Legg Mason’s SIV exposure has fallen sharply over the course of the year, down from $10bn in October 2007 to $1.4bn today.