June 5, 2012 / 1:41 PM / 5 years ago

TEXT-Fitch rates BofA money market and muni reserves

 (The following statement was released by the rating agency)	
 June 5 - Fitch Ratings has assigned 'AAAmmf' ratings to the following money
market funds advised by BofA Advisors, LLC (BofA), an indirect, wholly owned
subsidiary of Bank of America Corporation (NYSE: BAC):	
	
--BofA Money Market Reserves;	
--BofA Municipal Reserves.	
	
KEY RATING DRIVERS:	
	
--Overall credit quality and diversification;	
--Short maturity profiles;	
--Minimal exposure to interest rate and spread risks;	
--Capabilities and resources of BofA as investment advisor. 	
	
The 'AAAmmf' money market fund ratings reflect the funds' extremely strong 	
capacities to achieve their investment objectives of preserving principal and 	
providing shareholder liquidity through limiting credit, market, and liquidity 	
risk. 	
	
FUNDS' CREDIT PROFILES	
	
BofA Money Market Reserves seeks to maintain a high credit quality consistent 	
with Fitch's criteria for 'AAAmmf'-rated money market funds by investing 	
exclusively in short-term securities rated at least 'A/F1' by Fitch or 	
equivalent. The fund's investments may include bank obligations issued by 	
domestic and foreign issuers, commercial paper, corporate bonds, municipal 	
securities and repurchase agreements collateralized by various types of 	
collateral. Counterparty risk in repurchase agreements is limited by transacting	
with entities rated 'F1' or higher, or those that are integrated members of 	
financial institutions rated 'A/F1' or higher. 	
	
As of May 18, 2012 BofA Money Market Reserves had $11.1 billion in assets under 	
management. As of the same date the fund's Portfolio Credit Factor (PCF) met 	
Fitch's 'AAAmmf' rating criterion of 1.50 or less. The PCF is a risk-weighted 	
measure of the portfolio's assets that accounts for the credit quality and 	
maturity profile of the portfolio's securities. 	
	
BofA Municipal Reserves seeks to maintain a high credit quality consistent with 	
Fitch's criteria for 'AAAmmf'-rated money market funds by investing exclusively 	
in short-term securities rated at least 'A/F1' by Fitch or equivalent. The fund 	
also invests at least 80% of its net assets in securities that pay interest 	
exempt from federal income tax although such securities could be subject to the 	
federal alternative minimum tax. As of May 18, 2012 BofA Municipal Reserves had 	
$3.2 billion in assets under management.	
	
MATURITY PROFILES	
	
Both funds seek to limit interest rate and spread risk consistent with Fitch's 	
ratings criteria for funds rated 'AAAmmf'. Both funds limit their weighted 	
average maturity (WAM) and weighted average life (WAL) to 60 days and 120 days, 	
respectively. As of May 18, 2012, BofA Money Market Reserves had a WAM of 46 	
days and a WAL of 60 days; BofA Municipal Reserves had a WAM of 29 days and a 	
WAL of 34 days.	
	
LIQUIDITY PROFILES	
	
The funds additional investment restrictions are aimed at maintaining sufficient	
levels of daily and weekly liquidity to meet investor redemption requests. In 	
line with amended Rule 2a-7 under the Investment Company Act of 1940, which 	
governs the investment activities and operations of U.S. money market funds, 	
BofA Money Market Reserves invests at least 10% of its portfolio in daily liquid	
assets and at least 30% of its portfolio in weekly liquid assets. BofA Municipal	
Reserves invests at least 30% of its portfolio in weekly liquid assets.	
	
As of May 18, 2012, both funds met the liquidity requirements mandated by Rule 	
2a-7 and were also in line with the liquidity guidelines outlined in Fitch's 	
rating criteria. 	
	
 	
	
INVESTMENT ADVISOR	
	
BofA, the funds' investment advisor is a subsidiary of BofA Global Capital 	
Management, which is a cash investment management division of Bank of America 	
Corporation (rated 'A/F1), one of the world's largest financial institutions. 	
BofA Global Capital Management has over $78 billion in assets under management 	
(as of Dec. 31, 2011) and is focused solely on the management of short-term debt	
portfolios and has access to the extensive resources of Bank of America, 	
including the insights of the bank's economists, market strategists and 	
fixed-income specialists.	
	
Fitch views BofA and BofA Global Capital Management's investment advisory 	
capabilities, resource commitment, operational controls, corporate governance, 	
and compliance procedures as consistent with the ratings assigned to the funds.	
	
RATING SENSITIVITY AND SURVEILLANCE	
	
The ratings may be sensitive to material changes in the credit quality, market 	
or liquidity risk profiles of the funds. A material adverse deviation from Fitch	
guidelines for any key rating driver could cause the ratings to be lowered by 	
Fitch, including adverse changes in shareholder concentration and/or increase in	
unanticipated cash outflows. Given the portfolio's primary investment focus on 	
domestic and foreign issuers in the financial sector, the ratings may also be 	
sensitive to material adverse changes in the sector globally. 	
	
Fitch expects to receive weekly portfolio holdings information from the funds' 	
administrator to conduct surveillance against ratings guidelines and maintain 	
its money market fund ratings. 	
	
 (Caryn Trokie, New York Ratings Unit)	
 

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