Capital Support Agreement Protects AAA Credit Ratings of Wells Fargo Advantage Money Market Funds
Wells Fargo Bank, N.A. recently entered into a Capital Support Agreement for the Wells Fargo Advantage Prime Investment Money Market Fund
and the Wells Fargo Advantage Heritage Money Market FundSM
. These voluntary actions were taken only to support the AAAm and Aaa ratings of these funds by Standard and Poor's and Moody's, respectively. No action has been necessary to maintain the one-dollar net-asset value (NAV) of these funds. The one-dollar NAVs of all Wells Fargo Advantage Money Market Funds have been, and continue to be, stable.
The Capital Support Agreement provides for cash infusions from Wells Fargo Bank to the respective funds, if deemed necessary, to maintain their AAA ratings. These actions were initiated in response to the technical default of Victoria Finance, LLC, a structured investment vehicle (SIV) that represented a fractional holding in both funds. While Victoria Finance still has asset value, it is in default. Although we expect recovery value on this SIV at a later date, we have recently pledged this capital support for these funds in order to maintain their credit ratings.
All of the AAA-rated Wells Fargo Advantage Money Market Funds have continuously maintained their AAA credit ratings uninterrupted. The Wells Fargo credit team continues to rigorously review the credit quality of its investments and to promote the funds' primary objectives of seeking current income, while preserving capital and liquidity.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Wells Fargo Advantage Money Market Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund. The U.S. Government guarantee applies to certain of the underlying securities and NOT to shares of the Government money market funds. A portion of the tax-free and municipal money market funds' income may be subject to federal, state, and/or local income taxes or the alternative minimum tax (AMT).