Und noch ein Beispiel für die Probleme, die die aktuelle Situation an den Finanzmärkten mit sich bringt - gefunden bei bloomberg.com (Hervorhebungen von mir hinzugefügt):
Florida Schools Struggle to Pay Teachers Amid Freeze (Update4)
By David Evans
Nov. 30 (Bloomberg) -- School districts, counties and cities across Florida sought to raise cash after being denied access to their deposits in a $14 billion state-run investment fund.
The Jefferson County school district was forced to take out a short-term loan to cover payroll for the 220 teachers and other employees in the system after $2.7 million it held in the pool was frozen yesterday. At least five other districts also obtained last-minute loans, said Wayne Blanton, executive director of the Florida School Boards Association.
``The unthinkable and the unimaginable have just happened here in Florida,'' said Hal Wilson, chief financial officer of the Jefferson County school district, located 30 miles (48 kilometers) east of the state capital Tallahassee. ``What we just experienced here is a classic run-on-the bank meltdown.''
Florida's State Board of Administration, manager of the Local Government Investment Pool, halted withdrawals yesterday at an emergency meeting after $13 billion was pulled out this month from participants. Governments from Orange County, home of Disney World, to Pompano Beach asked for their money back following disclosures that the fund held $1.5 billion of downgraded and defaulted debt.
An advisory panel of school and local government officials with money in the frozen investment pool told the fund's management late today, following a more than two-hour conference call, that they won't accept a return of less than 100 percent of their investment.
Trusting State Board
Wilson said he trusted the State Board of Administration's assurances that the money was safe even as other pool participants withdrew billions of dollars.
``I should have seen the handwriting on the wall,'' Wilson said. ``But I didn't want to start a run on the pool.''
The board said $1 billion was withdrawn from the pool just before the freeze, reducing the fund's size to $14 billion, a 48 percent decline for the month. Yesterday, state officials said the pool held $15 billion.
Thousands of school districts, towns and fire departments across the U.S. keep their cash in state- and county-run pools. These public accounts, modeled after private money-market funds, are supposed to invest in safe, liquid, short-term debt such as Treasuries and certificates of deposit from highly rated banks.
By freezing the Florida fund, officials left governments without ready access to cash they are accustomed to drawing upon for routine expenditures. The pool was the largest of its kind in the U.S. at $27 billion before the unprecedented withdrawals.
Rejected Option
The newly formed advisory panel rejected a State Board Administration proposal for a survey of affected agencies to learn whether they would accept as little as 90 cents on the dollar.
``The very fact that you're out here talking to us about taking less than 100 percent is in my mind unacceptable,'' said MaryEllen Elia, superintendent of Hillsborough County Public Schools. The county has $573 million frozen in the pool, more than any other school district. ``You need to figure out how to make the taxpayers in Florida whole.''
The Florida board's trustees, Governor Charlie Crist, state Chief Financial Officer Alex Sink and Attorney General Bill McCollum, will meet Dec. 4 to consider the crisis.
State Board Administration officials were to select an independent investment adviser today to work over the weekend analyzing the pool's situation, said Tara Klimek, a spokeswoman for Sink.
Avoiding Conflicts
Officials worked to find an investment bank without a conflict of interest, Klimek said. With input from that adviser, and the newly created advisory panel of pool participants, the board may announce a plan to permit emergency withdrawals at the meeting in Tallahassee, she said.
Standard & Poor's yesterday said it contacted state officials about whether the fund holds any money for debt service payments by local governments and whether that cash will be made available. The credit-rating company said it hadn't yet received information and was monitoring the situation.
The Florida fund had invested $2 billion in structured investment vehicles, or SIVs, and other debt tainted by the collapse of the subprime mortgage market, state records show. Connecticut, Maine, Montana and King County, Washington, are among other governments holding similar investments, in smaller quantities, in some cases prompting redemptions.
In Montana, school districts, cities and counties withdrew $247 million from the state's $2.4 billion investment pool in the past three days. The fund's executive director in a Nov. 28 memo said the pool held $90 million in an SIV issued by Axon Financial that was downgraded to D, or default, by S&P earlier this week.
Stem Losses
The State Board manages the fund along with other short- term investments and the state's $137 billion pension fund.
The panel is considering ways to shore up the fund, including obtaining credit protection for $1.5 billion of downgraded and defaulted holdings hurt by the subprime market collapse. In voting for the suspensions, officials sought to stem the flood of money leaving the pool and avoid losses on forced sales of assets.
The investment pool's debt holdings that were downgraded below its minimum standards have a face value amounting to about 10 percent of the pool. Officials disclosed the investments in a report delivered to Crist Nov. 14 following a month of inquiries by Bloomberg News.
``This situation points up the need for monies held in trust by local and state governments to be subject to searching due diligence and constant risk assessment,'' said Harvey Pitt, former chairman of the U.S. Securities and Exchange Commission.
Downgraded Debt
The fund's $900 million of asset-backed commercial paper that was downgraded to default amounts to 6 percent of its assets. Another $650 million, or 4 percent, is invested in certificates of deposit at Countrywide Bank FSB, a unit of Countrywide Financial Corp. The bank's rating was cut to Baa1, three levels above junk status, by Moody's Investors Service on Aug. 16.
The pool owns $168 million of debt from KKR Atlantic Funding Trust cut to D from B by Fitch Ratings on Oct. 8. It also has $356 million issued by KKR Pacific Funding Trust, cut to D from B by Fitch Ratings on Oct. 2. Fitch said the cut to default on the debt reflected non-payment under the original terms. The debt was restructured to extend the maturities to February and March, and interest payments are continuing.
Default Rating
Florida's pool has $180 million of paper from Ottimo Funding, cut to D from C by S&P on Nov. 9. S&P said an auction of Ottimo's collateral ``did not generate cash proceeds'' to repay the asset-backed commercial paper.
The pool also holds $175 million of short-term debt issued by Axon Financial Funding, the SIV also held by Montana. It was cut to D from C by S&P this week. S&P said Axon failed to pay liabilities maturing Nov. 26, causing an ``automatic liquidation event.''
Wilson at Jefferson County said he plans to withdraw the school district's money from the pool as soon as he can, and won't consider investing there again.
``They won't have to worry about little Jefferson County any more,'' Wilson said.
To contact the reporter on this story: David Evans in Los Angeles at davidevans@bloomberg.net .
Last Updated: November 30, 2007 21:01 EST
