Fitch Confirms LMP Corporate Loan Fund Taxable Auction Rate Pref'd Stock 'AAA'.NEW YORK -- Fitch confirms the 'AAA' ratings assigned to the remaining $35,000,000 of outstanding Taxable Auction Rate Preferred Stock Auction rate preferred stock (ARPS)
Floating rate preferred stock, whose dividend is adjusted every seven weeks through a Dutch auction. (TARPS) Series A and B issued by LMP LMP left mentoposterior (position of fetus); last menstrual period.
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LMP Last menstrual period, see there Corporate Loan Fund Inc (the Fund). This ratings confirmation follows the redemption of 1000 shares in each of the above-mentioned series in the total amount of $50,000,000. The redemption price is equal to the required liquidation preference of $25,000 per share plus accrued and unpaid dividends. The 'AAA' ratings denote expectations of very low credit risk.
The Fund intends to change its primary method of leverage from TARPS to a combination of TARPS and a financing arrangement with a major unaffiliated financial institution (Financing Arrangement). Each series of the Fund's TARPS are redeemed via procedures of the Depository Trust Company Depository Trust Company (DTC)
DTC is the world's largest central securities depository. It accepts deposits of over 2 million equity and debt securities issues (valued at $23 trillion) from over 65 countries for custody, executes book-entry deliveries (valued at over $116 trillion (DTC DTC
See: Depository Transfer Check
See: Depository Trust Company
See Depository Trust Company (DTC). ) on Sept. 11, 2008 for Series A and Sept. 18, 2008 for series B.
LMP Corporate Loan Fund Inc., a non-diversified investment management company, is managed by Legg Mason Partners Fund Advisor, LLC, a wholly-owned subsidiary of Legg Mason, Inc. and is sub-advised by Citigroup Alternative Investments LLC, an indirect wholly-owned subsidiary of Citigroup Inc that commenced operations November 2003. Its shares of common stock are traded on the NYSE NYSE
See: New York Stock Exchange under the symbol TLI.
The fund seeks to maximize current income consistent with prudent efforts to preserve capital. The objective is pursued by investing in interests in floating or variable rate collateralized senior loans to corporations, partnerships and other business entities. Under normal market conditions, the fund invests at least 80% of total assets in collateralized senior loans rated, when purchased, below investment grade by a Nationally Recognized Statistical Rating Organization A Nationally Recognized Statistical Rating Organization (or "NRSRO") is a credit rating agency which issues credit ratings that the U.S. Securities and Exchange Commission (SEC) permits other financial firms to use for certain regulatory purposes. (NRSRO), or of comparable quality if unrated. TLI may also invest up to 20% of total assets in uncollateralized senior loans; investment and non-investment grade corporate debt securities and U.S. government debt securities, both with maturities no longer than five years from the date they are acquired by the fund; money market instruments Money market instruments
See: Cash investments ; derivatives designed to hedge risks inherent in the fund's portfolio; and certain other securities.
The confirmed ratings are based on the strength of the Fund's underlying portfolio that provides preferred stock liquidation coverage, as well as the quality and experience of the Fund's investment manager, Legg Mason Partners Fund Advisor, LLC (LMPFA) At the time of the ratings, the Fund's pro-forma TARPS coverage ratios calculated in accordance with the Fitch Basic Maintenance Amount Test satisfied a minimum coverage ratio of at least 100%. Additionally, the Fund's pro-forma TARPS coverage ratios calculated in accordance with the requirements of the 1940 Act as amended satisfied regulatory requirements mandating an asset coverage ratio Asset Coverage Ratio
A test that determines a company's ability to cover debt obligations with its assets after all liabilities have been satisfied. It is calculated as the following: of at least 300% for the Financing Arrangement and an asset coverage ratio of at least 200% for a combination of TARPS and the Financing Arrangement. At the time of ratings, the Fund's total leverage was approximately 42% of its total assets.
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