Merrill Lynch to buy back auction rate securities from clients The co announces that effective January 15, 2009, and through January 15, 2010, it will offer to buy at par auction rate securities sold by it to its retail clients. "Our clients have been caught in an unprecedented liquidity crisis," said John Thain, chairman and chief executive officer. "We are solving it by giving them the option of selling their positions to us." Merrill Lynch acknowledges the important role being played by the SEC; the New York state attorney general, Andrew M. Cuomo; the Massachusetts Securities Division and the North American Securities Administrators Association on these issues. Merrill Lynch also will continue to work closely with and encourage auction rate securities issuers in their restructuring efforts to resolve the outstanding liquidity issues for all of Merrill Lynch's retail and institutional clients. Merrill Lynch's action creates liquidity for more than 30,000 clients who hold municipal, closed-end funds and student loan auction rate securities. Merrill Lynch retail clients currently hold an estimated $12 billion in auction rate securities, which Merrill Lynch expects to be reduced to under $10 billion by January 2009 as a result of announced and anticipated issuer redemptions... The auction rate securities that are owned by Merrill Lynch's clients are predominantly rated AAA and are not credit-impaired. Merrill Lynch does not expect its redemption of auction rate securities in 2009 through 2010 to have a materially adverse impact on its capital ratios, liquidity, or consolidated financial performance. www.theoddlot.net
Of course the FED will bail these guys out, once again. If you could borrow cheaply, (virtually free), to cover your ass of your mistakes, and buy some time as you tried to figure out how else you can dupe a new crop of investors tp pay for the last round of shenanigans, would you do so? It's a certainty they will find a friendly shoulder to lean on at Uncles Ben's, after all, he is 'dealing' (with) OPM. Let me guess, how they gonna package this one...'well, since they are based on municipal securities, maybe we outta permit a special borrowing term especially for this group of securities, how about 2 years fellas, will that do ya for starters?' Wonder what happens when municipalities begin to feel the strain, from lowered revenues that fall short of their obligations?