Legg Mason Announces Debt Repayment and Debt Covenant Modifications



    
    Sold Remaining $49 Million in SIV Exposure on Balance Sheet

    
    BALTIMORE, April 1 /CNW/ -- Legg Mason, Inc. (NYSE:   LM) today announced
that it has repaid debt and amended its debt agreements with its lenders,
allowing the Company to sell the $49 million in carrying value of Structured
Investment Vehicles (SIVs) that had remained on its balance sheet after Legg
Mason removed all SIVs from money market funds on March 5, 2009.  This action
will not materially change the impact of the SIV transactions on the Company's
quarterly results that was reported on March 5th.
    

    
    Legg Mason Chief Financial Officer Charles J. Daley, Jr. commented: "We
are pleased to make progress on our goal to reduce debt levels and take the
final step to eliminate SIVs from our balance sheet.  In taking these actions,
we have also provided our Company continued flexibility, as we reduce our cost
base and focus on growth opportunities, to manage through markets that
continue to be challenging."
    

    As part of the amended debt agreements, Legg Mason will:
    --  Revise the leverage ratio covenant to allow it to reduce includable
        debt by the Company's unrestricted cash in excess of working capital. 
        This will reduce the December 31, 2008 proforma debt leverage ratio to
        approximately 1.5X.
    --  Repay $250 million of its Revolving Credit Facility and reduce its
        revolver commitment to $500 million from $1.0 billion.

    --  Expand the loss exclusion for SIVs from $2.75 billion to $3.0 billion,
        allowing the Company to eliminate the remaining SIV exposure with no
        effect on the bank EBITDA calculation.

    
    The Company also sold its remaining SIV exposure for approximately $49
million in proceeds.  Together with the expected tax benefit from the previous
sales of SIV securities, the Company expects to receive a combined tax benefit
of approximately $520 million.  After the transactions, and giving effect to
the expected tax refunds and the debt repayment, the Company's total cash
position will be $1.5 billion, including $600 million in working capital.  In
addition, the Company will carry forward approximately $450 million of future
tax income benefits.
    

    About Legg Mason
    
    Legg Mason is a global asset management firm with $698 billion in assets
under management at December 31, 2008. The Company provides active asset
management in major investment centers throughout the world. Legg Mason is
headquartered in Baltimore, Maryland, and its common stock is listed on the
New York Stock Exchange (symbol: LM).
    Legg Mason, Inc.




For further information:

For further information: Investors, F. Barry Bilson, +1-410-454-2963, or
Media, Mary Athridge, +1-212-805-6035, both of Legg Mason, Inc. Web Site:
http://www.leggmason.com

Organization Profile

LEGG MASON, INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890