Legg Mason Provides Money Market Fund Update

    BALTIMORE, Sept. 19 /CNW/ -- Legg Mason, Inc. (NYSE:   LM) announced that
the Company has entered into additional support measures with three money
market funds managed by a subsidiary of the Company, given current market
conditions.  Neither the funds nor their shareholders incurred a loss in these
transactions.  Legg Mason also provided an update regarding the earnings
impact to the quarter of these actions as well as incremental mark-to-market
charges attributable to previous money market fund support through today's
    The Company has amended two existing capital support agreements (CSA), to
provide for it to make up to an additional $350 million in capital
contributions to one fund upon certain events relating to certain Asset Backed
Commercial Paper (ABCP) securities in the portfolios.  In a second fund, the
Company has established a CSA under which it will make up to $20 million in
contributions upon certain events related to certain ABCP securities in the
portfolio.  In a third fund, the Company has acquired two letters of credit
(LOC) that effectively expand existing LOC support for two ABCP securities by
approximately $260 million as required by a ratings agency to maintain its AAA
rating, reflecting recently revised ratings requirements.  The Company has
fully collateralized each obligation.  The Company is filing a Form 8-K with
further details of these transactions.
    "Right now, financial markets are operating under severe stress.  As
history has shown they will stabilize and ultimately recover. In the meantime,
Legg Mason will continue to act in support of our clients, our funds and our
corporate shareholders as appropriate.  We appreciate all steps taken by the
Treasury Department, the Securities and Exchange Commission, the Federal
Reserve and our industry colleagues to work together to bring confidence back
to the markets," said Mark R. Fetting, the Company's president and chief
executive officer.  "We remain committed to providing our fund shareholders
with principal stability, credit quality, and current income, although no
guarantees can be given."
    "Legg Mason raised capital during the first six months of this year in
part to provide the Company with additional financial strength to work through
potential issues caused by continued uncertainty in the credit markets.  Our
balance sheet and core earnings continue to provide a strong buffer to absorb
these unrealized losses.  The money market funds do not hold any Lehman
Brothers, AIG or Washington Mutual paper.  Today's action is part of our
continued monitoring of credit and liquidity market conditions and we may take
additional action if we deem it appropriate," concluded Mr. Fetting.
    Impact on Quarterly Earnings
    Reflecting the actions announced today as well as incremental mark-to-
market charges attributable to previous money market fund support, the Company
expects to incur an estimated $318 million non-cash charge in the quarter to
date operating results ($187 million net of adjustments to operating expenses
and taxes, or $1.33 per diluted share.)
    About Legg Mason
    Legg Mason is a global asset management firm, with $923 billion in assets
under management as of June 30, 2008, and approximately $187 billion in
liquidity assets as of September 17, 2008. The Company provides active asset
management in many 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).
    This release contains forward-looking statements subject to risks,
uncertainties and other factors that may cause actual results to differ
materially. For a discussion of these risks and uncertainties, see "Risk
Factors" in Legg Mason's Annual Report on Form 10-K for the fiscal year ended
March 31, 2008.
    An investment in a money market fund is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation or any other government agency.
Although a money market fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in a money market
    Legg Mason, Inc.

For further information:

For further information: Investor Relations, F. Barry Bilson,
+1-410-539-0000; Media, Mary Athridge, +1-212-805-6035, both of Legg Mason,
Inc. Web Site: http://www.leggmason.com

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